This morning while screening sectors on Barchart I noticed that Health Maintenance Organizations (HMOs) sector was one of the fastest rising sectors. This is in spite of all the Obama-Care uncertainty we hear out of Washington. The 3 I found to have interesting numbers was Wellcare Group (WCG), Magellan Health Services (MGLN) and United Health Group (UNH). Let's look at the numbers and see what you think.
Wellcare Group (WCG)
Barchart technical indicators:
- 100% Barchart technical buy signals
- Trend Spotter buy signal
- Above its 20, 50 and 100 day moving averages
- 8 new highs and up 6.38% in the last month
- Relative Strength Index 65.04% and rising
- Trades around 53.20 with a 50 day moving average of 48.23
Magellan Health Services (MGLN)
Barchart technical indicators:
- 100% Barchart technical buy signal
- Trend Spotter buy signal
- Above its 20, 50 and 100 day moving averages
- 5 new highs and up 4.87% in the last month
- Relative Strength Index is 64.36% and rising
- Trades around 54.73 with a 50 day moving average of 51.74
Barchart technical indicators:
- 96% Barchart technical buy signals
- Trend Spotter buy signals
- Above its 20, 50 and 100 day moving averages
- 5 new highs and up 8.83% in the last month
- Relative Strength Index is 64.31% and rising
- Trades around 52.44 with a 50 day moving average of 49.56
Summary: I think all 3 will do well in the years ahead but United Health Group (UNH) is my personal favorite. It is more widely followed by both the individual and profession investors and gets the highest marks from them. I don't like it because its the favorite but because it is much larger than the other 2. The health care industry is going to be the focus of lots of governmental regulation and larger companies have the staff to negotiate those dangerous waters. With the 5 year earnings growth rate of 11.32% , an increased dividend rate, stock buy backs and an increase P/E ratio investors could see a total annual return of 16% - 18% over the next 5 years.
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