Dental supply stock surges on RFK’s anti-fluoride stance, activist involvement

Dental care supplier Henry Schein advanced in Monday trading as investors bet that Robert F. Kennedy Jr., President-elect Donald Trump’s pick for Health and Human Services secretary, could recommend removing fluoride from the U.S. water system, a move that would lead to a boom in dental visits.

Shares of Henry Schein shares jumped about 7.5%, notching its best day since 2022. Fellow dental product makers Dentsply Sirona and Envista also rose in the session.

Monday’s moves come as investors ready for public health changes under a second Trump administration. Kennedy posted on X before the presidential election this month that a “Trump White House will advise all U.S. water systems to remove fluoride from public water.”

Fluoride has long been shown as an effective method for fighting cavities. But the mineral has found itself at the center of a nationwide fight that’s led some local communities to end programs centered on its insertion into public water.

While Kennedy will need to win Senate approval to take the job, market participants are already zeroing in on a group of stocks that make dental hygiene products as potential beneficiaries of his policies. That’s because taking fluoride out of water would actually put the tooth cleaning industry in higher demand as consumers look elsewhere to fight cavities, according to firm Gordon Haskett.

“The thought here is RFK will bring to HHS a voice that is in favor of reducing, or eliminating, the amount of fluoridation that is added to drinking water,” Don Bilson, Gordon Haskett’s head of event-driven research, told clients in a Monday note. “This will, in turn, lead to an acceleration of tooth decay and more dental visits.”

Henry Schein shares took a leg up in afternoon trading following a Reuters report that activist investor Ananym Capital was calling for changes at the company. The newly launched firm, which is led by Charlie Penner and Alex Silver, believes the board should be shaken up and costs should be cut, among other ideas.

Henry Schein and other stocks in the space offer a bright spot within a sector that has largely struggled since the election. The Health Care Select Sector SPDR Fund (XLV) has tumbled more than 3% in November, putting it on track for its first three-month losing steak since last year. By comparison, the broad S&P 500 has climbed more than 3% in the month.

Gordon Haskett’s Bilson also pointed out that dental stocks were some of the few “spared” health-focused equities as investors responded to the announcement of Kennedy’s nomination last week. Pharmaceutical names were under pressure given Kennedy’s reputation as a vaccine skeptic, while processed food stocks took a hit as traders geared up for increased scrutiny of so-called junk food.

“It caused widespread selling across the healthcare landscape,” Bilson said of the decision to select Kennedy. “Drugmakers, contract research organizations, and health insurers all felt the quake. Rather than stop there, the damage spilled into packaged foods. And advertising.”

While the market appears to be moving on Kennedy’s nomination, Bilson said that regulatory changes would likely take years to come into effect. He also noted that drinking water should fall more under the Environmental Protection Agency than Health and Human Services.