The Blubber

Dental care supplier Henry Schein saw a significant boost in trading on Monday, as shares surged 7.5%—marking the company’s best day since 2022. Investors speculated that President-elect Donald Trump’s Health and Human Services secretary nominee, Robert F. Kennedy Jr., could advocate for the removal of fluoride from U.S. water systems, potentially driving an increase in dental visits.

Other dental product manufacturers, including Dentsply Sirona and Envista, also experienced gains, reflecting market anticipation of policy shifts under a second Trump administration. Before the presidential election, Kennedy suggested on X that a “Trump White House will advise all U.S. water systems to remove fluoride from public water,” a move that could have far-reaching implications for public health and the dental care industry.

Fluoride, long recognized as an effective tool for preventing cavities, has been the subject of heated debate in recent years, with some communities discontinuing its use in public water supplies. While Kennedy’s appointment would require Senate confirmation, the market has already begun identifying dental hygiene product stocks as potential winners if fluoride is removed from water. According to research firm Gordon Haskett, consumers might seek alternative ways to combat tooth decay, potentially increasing demand for dental services and products.

Don Bilson, head of event-driven research at Gordon Haskett, noted in a client memo that Kennedy’s stance on fluoridation could lead to “an acceleration of tooth decay and more dental visits.” He added, “The thought here is RFK will bring to HHS a voice in favor of reducing or eliminating fluoridation in drinking water.”

Henry Schein shares received an additional boost in the afternoon after a Reuters report revealed that activist investor Ananym Capital, led by Charlie Penner and Alex Silver, is calling for changes at the company, including board restructuring and cost reductions.

This positive movement in dental stocks contrasts with struggles across the broader healthcare sector. The Health Care Select Sector SPDR Fund has fallen more than 3% in November, marking its first three-month losing streak since last year. In contrast, the S&P 500 has climbed over 3% in the same period.

While dental stocks have been spared some of the broader market's volatility, other health-related equities have not fared as well. Pharmaceutical companies, contract research organizations, and health insurers faced pressure last week following Kennedy’s nomination, given his reputation as a vaccine skeptic. Processed food stocks also dipped on concerns about heightened scrutiny of junk food under his potential leadership.

Despite the market's initial reaction, analysts, including Bilson, caution that any regulatory changes involving fluoride would likely take years to implement. Moreover, oversight of drinking water may fall more under the Environmental Protection Agency than Health and Human Services, potentially complicating such initiatives.