HMS Holdings Corp. (NASDAQ:HMSY)

Health care play.

healthcare cost control play.

The stock carries a strong analyst rating, and recently broke out past its recent resistance point of $32, after two weeks of consolidation in the $31 to $32 range. Wednesday's high volume buying that drove the stock past $32 to $33.63, before its closing at $33.13, suggests buying pressure strong enough to continue driving the stock forward.

jim oberweis 2009 pick

Strong industry and chart shows stock is breaking out to the upside

IBD

The RAND Corporation, a leading health care think tank, estimates the industry could save $162 billion per year through the simple IT upgrades. Switching records from a paper-based system to an electronic one and using bar coding and tracking software will save hospitals time and money, which will also lead to increased efficiency.

And the only way to make these changes is to put more money into health care IT. Last year, health care IT spending by doctors, hospitals, pharmacies, insurers, and the U.S. government totaled about $20 billion. So Obama's $50 billion plan is a significant boost.

Even accounting for a decrease in IT expenditures due to the recession, Obama's plan is enough to drive revenue and earnings to new heights for the sector.

16

Experiment time... I will pick whatever stocks that are on the cold 5 star list on the last trading day of each month. There is no research involved other what is on the cold 5 star list at the end of each month. Each pick will be for one year. Lets see where this goes...

important in the presidential race.....

Pretty steady market to be a part of!

Complusary Health Care as part of the presidential debate?

HMS dominates its field in a way that few small companies can claim. Its only real competition comes from states attempting to do it themselves. Last year HMS bought the only national private competitor, and it continues to make small acquisitions that broaden its offerings. I estimate its total potential market at about $2B, v. 2007E revenue of $144M. HMSY is a prodigious cash generator, and though the multiple is high, so are the barriers to entry.

Strong P/E ratio

trend reversal from bearish. good FA rating
Possible retraction to 23-24. Stop below 23.

I wish I could buy this stock but my wife has a conflict of interest since her agency contracts with this company. So I'll pick it in CAPS instead. What I like about it is that they sell cost containment services to the government. If you have private health insurance and you try to bill Medicare for something your health insurance should cover, these guys are supposed to catch it. I think it's a great idea. I also think they'll get business solely because who is going to criticize a government agency for spending some money to save some more money?

momentum only

great company

Can you say Government Healthcare ? I'm going for it for the time being.