This week we learned that the cuts for Medicare Advantage plans would be less than anticipated and six of the eight health maintenance stocks I am profiling today popped to new multi-year or 2013 highs on Tuesday. As a result of these price pops, Humana
It's been a while since I profiled these stocks. On June 28 I wrote, How Health Care Stocks Are Faring and among the nine stock covered four had strong buy ratings and five had buy ratings. This post provided my buy-and-trade strategies as the Supreme Court deliberation was coming to an end.
In late June the medical sector was 7.4% overvalued with the health maintenance industry 5.6% undervalued. Today the medical sector is 9.7% overvalued with the health maintenance industry 5.0% undervalued. Four of the stocks profiled today are buy-rated and four are hold-rated, so the group as a whole is not as favorable today as they were on June 28.
Reading the Table
OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.
VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.
Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.
Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.
Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.
Risky Level: Price at which to enter a GTC limit order to sell on strength.
Coventry Health Care
Humana ($79.11 vs. $79.54 on June 28): Has been downgraded to hold from buy this morning after setting a new 2013 high at $82.47 on Tuesday. My weekly value level is $67.09 with a semiannual pivot at $77.58 and semiannual risky level at $87.03. The weekly chart profile shifts to positive with a close this week above the five-week modified moving average at $71.89.
WellCare Health Plans
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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