Healthcare & Insurance

• With Nursing Homes In Higher Demand, This Recent IPO Has A Lot of Long-Term Growth To Look Forward To- This Mission Viejo, CA company operates 54 skilled nursing facilities and 7 assisted living facilities in California, Arizona, Texas, Utah, and Idaho. One thing is for sure about our population: it is aging and it will continue to age as we continue to find drugs that help us live longer and healthier lives. Proof that this new company is doing well early on is the recent growth the past three quarters in EPS with 20%, 55%, and 19% growth. That combined with revenue growth the past eight quarters of 20%, 15%, 18%, 17%, 13% 12%, 16%, and 15% shows that this company is clicking on all cylinders. Future estimates for the company are great with YOY ESP gains of 35% and 20% expected in 2008 and 2009 respectively. Recently earnings guidance was raised and that has been a recent pattern that could continue into the future. Especially when the company has a 23% return on equity and a strong cash flow of $1.31 per share. The company only has 47% of debt to shareholder equity which is not much to worry about when you have this kind of growth.
• Medical Stock Is A Leading All-Star, In A Market That Isn’t Going Anywhere Fast- This stock is an all-star and a major winner already, even after its heavy volume hit on Tuesday. Many people will think the gains have already been made but the smart investor knows that if this companies products are for real, this would be just the start. Its products include in-home nursing services and personal custodial care for recuperating and disabled patients. A service that should only increase as the public ages and hurts itself. Almost Family Inc. (AFAM) has been on a tear recently making it too risky as a long up in the stratosphere. However, eventually this stock has to pullback and that is where I would be looking to get long. First before we discuss when we should buy the stock, let’s go over why the stock should continue to be a great stock well into the future.
• Buying Healthcare Stocks for an Obama Presidency (Part III)-

  In a previous post I spelled out, why I am buying healthcare stocks for an Obama presidency . In that post I promised to provide three stocks that would benefit from this fact. The first stock was AET and now I will discus the second stock in this series, Schering-Plough Corporation.

  Schering-Plough (SGP)

  Schering-Plough discovers, develops, manufactures, and sells pharmaceuticals worldwide. The company has a joint venture with Merck & Co., Inc. for the development and management of two cholesterol-lowering drugs and an allergy/asthma drug.

• Buying Healthcare Stocks for an Obama Presidency-

  If you own any healthcare stocks, especially HMOs, you have felt the unease of investors this year. In an election year, especially one in which universal healthcare has been a key position; these stocks have taken a tumble. Because of this idealism, some healthcare names have seen their share prices beaten down to historic levels, catching the attention of value investors’. I illuminate why this is the buying opportunity of the decade.

  Universal Healthcare

  Health industry executives and investors have few reasons to worry about the so called health care reforms or a universal system proposed by Democratic presidential nominee Barack Obama. While Obama is endorsing a universal coverage system, it is unlikely that he will be able to convince a 49-49 political party deadlock in the Senate and the small 236-199 democratically led House to endorse such a plan.

  In fact, democratic Senator Jay Rockefeller recently commented on the proposed healthcare reforms when he said “We all know there is not enough money to do all this stuff.”

• This Medical/dental-services company is flying below traders radars- This Medical/dental-services company is flying below traders radars GXDX provides diagnostic services to community based oncologists and hematologist treating blood, bone marrow and other cancers. This business has been amazing for this company as the fundamentals have many mutual funds wanting to load up on this stock. That is why we have seen ownership grow from 27 funds last quarter to 42 funds in the most recent quarter. This sort of accumulation with a management owning 46% of the shares outstanding is a severe confirmation of future price gains. GXDSX has had some incredible recent quarterly EPS growth of 200%, 388%, 540%, 999% and 325% the past five quarters. On top of that current growth we have EPS estimates for 2008 and 2009 for YOY growth of 18% and 4% respectively. Along with the incredible earings, the sales growth are doubly impressive with growth o f417%, 340%, 264%, 166%, 165%, 134%, 137%, and 109% the past eight quarters. This kind of sales growth with earnings growth will continue to find buyers on every pullback. I am also sure by the end of the year that mutual fund ownership will be over 100 funds.
• This Leading Medical Products Company from Switzerland Raises Guidance As its Stock Soars- This Leading Medical Products Company from Switzerland Raises Guidance As its Stock Soars Alcon Inc. is a Switzerland developer of pharmaceuticals, surgical tools, contact lens care, and other products for eye diseases and disorders. On April 23rd it raised its expectations for 2008 earnings to $6.39-$6.49 per share on revenue of $6.4 to $6.5 billion, above previous guidance. This continues a very bullish trend of strong earnings for this medical company that is standing out as the leader in a group that is slowly starting to rise as CYBX, ABMD, EXAC, NUVA, and EW all have the same chart patterns the past six months. As this group comes into favor though, this company stands out based on the fundamentals. EPS has grown 17%, 16%, 40%, 27%, 25%, 31%, 13%, and 18% the past eight quarters. Along with that stunning growth for a big stock, sales are just as impressive with growth of 12%, 12%, 16%, 14%, 12%, 11%, 20%, and 16% the past eight quarters. This kind of growth in a company making billions is not only impressive it is incredible.
• Almost Family (AFAM) - Demographic trends will drive this stock higher- MarketBeatingStocks likes ALMOST FAMILY INC (AFAM, Healthcare Facilities) based on their earnings and sales growth, low valuation, demographic trends, and strong analyst support. AFAM earnings growth over the past 12 months has been 57% and that is better than 73% of their industry competitors. Revenue and Earnings have both been growing consistently quarter over quarter for the past two years. The home health care services industry should certainly benefit long term with changing demographics as our population (baby boomers) continues to age. Despite the strong growth, the company PE ratio stands at 16, which is lower than 64% of their competitors, a level suggesting the stock is still undervalued relative to peers given their growth prospects. In early May, the stock price did jump with their most recent quarterly earnings report which exceeded estimates by +25%. However, the stock price has been consolidating and trading in a narrow range over the past four weeks after holding the May gains, and we think now is a good time to buy.