Use access key #2 to skip to page content.

HistoricalPEGuy (63.20)

Health Care Plans - The New Undervalued Sector

Recs

3

October 13, 2007 – Comments (0)

Wow - I just love it when the market doesn't give an entire sector its just valuation.  There are so many companies here with a great record of consistent earnings growth.  It isn't quite the Oil Services at the beginning of the year, which, by the way, have crushed the S&P to this point (see my earlier blogs from Jan / Feb / March).

First off, I really believe that we'll have a democratic president that will institute a national healthcare plan.  Here's what's exciting about the plans they are offering - healthcare plans to those that can't afford it.  This means a huge volume of cash directly injected into the healthcare system.  The first injection of cash will be those that maintain and facilitate plans.  The next injection will be the hospitals as they no longer have to absorb, pro bono, the cost of uninsured patients.  This is exciting for the healthcare sector - maybe not for the economy, but that's not the point of this blog...

So, where to invest.  First off, not all plan providers are the same so pick carefully.  I will readily admit, I'm not the best individual stock picker, that's why I'll choose a group of good ones and ride them.  Do your own homework and see what you come up with.  I love these stocks:

WLP:  Buffet!  Need I say more!  Yes, probably should say a bit more.  Very low historical PE and solid growth to come.  In the sweet spot as they help maintain government programs.

UNH:  At an all time low for Historical PE.  Love this stock but don't know that they'll benefit as much as WLP.

HUM:  A good stock, but would like it a little cheaper.  However, it has an entire section of the company to deal with government related plans.  Another that has lots to gain with the new healthcare plans.

Fool on!

-- HPEguy

0 Comments – Post Your Own

Featured Broker Partners


Advertisement