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Acute Care and Women's Health- Breakout Buys in Healthcare

Leo Fasciocco specializes in stocks that have broken out of technical bases; the editor of Ticker Tape Digest reviews two recent buys in the healthcare sector. Both have recently broken out to new all-time highs.

Universal Health Services (UHS), based in King of Prussia, Pa.,  operates acute care hospitals, outpatient facilities and behavioral healthcare facilities. Its annual revenues are $10.8 billion.

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UHS operates 326 inpatient facilities and 32 outpatient facilities, in 37 states and also in the U.K. The company's hospitals provide oncology, diagnostic care, coronary care, pediatric services, pharmacy services and behavioral health services.

Its acute care facilities in the U.S. included 26 inpatient acute care hospitals; four free-standing emergency departments, and four outpatient surgery/cancer care centers and one surgical hospital.

This year, analysts have been forecasting a modest 5% increase in net to $10.02 a share from the $9.53 the year before. That may get boosted. Looking out to 2020, analysts look for an 8% rise in net to $10.82 a share from the anticipated $10.02 this year.

The stock has just broken out from its four-month, cup-and-handle base. The move carries the stock to a new all-time high. That is bullish. We are targeting the stock for a move to $175 off of the breakout.

Hologics (HOLX), based in Marlborough, Mass., makes diagnostics products, medical imaging systems and surgical products with an emphasis on women's health. Its annual revenues are $3.2 billion.
The diagnostics products include Aptima family of assays, ThinPrep system, the Rapid Fetal Fibronectin Test and Procleix blood screening assays. It offers viral load assays for the quantitation of Hepatitis B Virus, Hepatitis C Virus and Human Immunodeficiency Virus-1.

The breast health products include breast imaging and related products and accessories, including digital mammography systems, computer-aided detection and breast biopsy guidance systems.

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The GYN surgical products include NovaSure Endometrial Ablation System and MyoSure Hysteroscopic Tissue Removal System.

This fiscal year ending in November analysts are forecasting a 9% increase in net to $2.42 a share from the $2.23 the year before. The stock sells with a price-earnings ratio of 20.

Looking out to fiscal 2020, the Street is predicting an 8% gain in net to $2.61 a share from the anticipated $2.42 this fiscal year. The company beat the consensus estimate eight out of the past 10 quarters.

The stock has broken out from its seven-week, cup-and-handle base, moving to a new all-time high. That is bullish. We now target a move to $60 within the next few months, or sooner.