(Repeats story first published on Friday with no changes to text)
By Saqib Iqbal Ahmed and Sinead Carew
NEW YORK, April 24 (Reuters) - Healthcare companies on a seven-year tear have been top performers so far in 2015, helping to push broad stock indexes to record levels, but traders are now looking to protect themselves from a selloff as they await major earnings reports in the sector.
Companies reporting first-quarter earnings next week include Bristol-Meyers Squibb Co, Boston Scientific Corp , Merck & Co, Pfizer Inc, Gilead Sciences Inc and Celgene Corp.
So far, companies that have reported in this sector have seen positive moves in share prices, and many investors say they think healthcare stocks have room to run.
But options traders are not taking chances. Options on a key healthcare exchange-traded fund (ETF) are set near their most defensive posture ever.
So far this year, the S&P healthcare sector index has risen 8.7 percent, leading all other S&P sector indexes. Since 2008, it has increased 179 percent while the broader S&P 500 is up 135 percent. On Thursday, healthcare's strong performance helped push the S&P 500 to an intraday record and the Nasdaq composite index to its all-time closing high.
Investors have been drawn to healthcare stocks by a spate of mergers and expectations for more buyouts on top of major drug launches and strong demand from an aging population.
"It's kind of tough to punch holes into the healthcare bull story," said Sven Borho, founding general partner at health specialist fund OrbiMed Advisors LLC, in New York.
"What worries me is the long stretch of outperformance relative to the rest of the market," he said. Even so, "it's not that healthcare valuations broadly have gone off the roof."
The sector is trading at 18.8 times earnings estimates for the year ahead compared to S&P's P/E ratio of 17.5.
Traders in the options market, however, are preparing for possible downside. Activity in puts, which can be used to hedge against a drop in shares, has picked up noticeably in April for the Health Care Select Sector SPDR ETF.
The average daily puts volume has risen to 16,000, from 9,000 for the first three months of 2015. For every call option, usually used for bullish bets, there are 4.6 put options open, the highest ratio since early 2007, right after their launch, according to options analytics firm Trade Alert.
"It's really just a function of investors looking to protect their gains," said Max Breier, senior equity derivatives trader at BMO Capital Markets. "In a market cap-weighted ETF like the XLV, if you get a number of the top-weighted names kind of disappointing at once you can get a pretty violent reaction," Breier said.
Companies reporting next week include Bristol-Meyers Squibb Co, Boston Scientific Corp, Merck & Co, Pfizer Inc, Gilead Sciences Inc and Celgene Corp.
Medical device maker Boston Scientific is the second-best S&P healthcare performer with a 39-percent share price gain so far this year. The most accurate analysts say it could meet earnings per share estimates for 20.4 cents per share or miss by a thread, according to StarMine.
Gilead could beat analysts' $2.30 EPS estimate by over 22 cents while Bristol-Meyers and Celgene could beat their EPS estimates by about a penny, according to StarMine.
Shares are more likely to react to comments about drug studies or pricing than to results, Borho said.
Wall Street analysts expect the S&P healthcare sector to report a 10.2 percent first-quarter earnings increase, compared with 7.2 percent expected on April 1 and 12.4 percent in October, Reuters data showed.
Other big events investors will watch next week include first-quarter GDP numbers and the Federal Reserve's statement after its two-day policy meeting on Wednesday. Apple Inc reports earnings on Monday afternoon in a week when oil companies are expected to report grim results. (Editing by Nick Zieminski)