However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.
Among the more than 460 stocks listed under health care in the CAPS' screener, we've unearthed a few with high five-star ratings. Those accolades mean our 135,000 CAPS members are confident that these stocks will beat the market in the months ahead, but let's see what members are saying about the five below:
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Company
|
CAPS Rating Today
|
Recent Price
|
52-Wk Price Change
|
Est. LT Growth Rate
|
|
China Medical (Nasdaq: CMED )
|
*****
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$15.84
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(67%)
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40%
|
|
Exelixis (Nasdaq: EXEL )
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*****
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$5.62
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(19%)
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0%
|
|
Johnson & Johnson (NYSE: JNJ )
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*****
|
$60.59
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(16%)
|
8%
|
|
UnitedHealth Group (NYSE: UNH )
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****
|
$27.79
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(16%)
|
11%
|
|
Viropharma (Nasdaq: VPHM )
|
*****
|
$7.03
|
(50%)
|
15%
|
Source: Motley Fool CAPS; Yahoo! Finance.
Even though the average company in the health-care sector lost about 12% of its value over the past year, there were still some notable high performers, such as Mannkind, which has seen its stock more than double, and Dendreon, which tripled in value. So let's take a closer look at why investors might think some of these companies won't be jumping from the frying pan into the fire.
Some spring in its step
It seems that however foot-stomping angry we are about our health insurance system, we're not so upset that we actually want the government running it. Despite limiting benefits, denying claims, and forcing us to enter the equivalent of the ninth circle of Dante's Inferno -- the voice-activated messaging system -- we still prefer having United Health and Wellpoint (NYSE: WLP ) providing our coverage instead of Congress.
Although there might be change around the periphery, investors have taken heart that it no longer seems certain we'll get a "public option" option. They've run up the shares of the average health care provider by up almost 10% over the past month, though it didn't hurt that UnitedHealth and Cigna also posted strong profit reports amid declining enrollment.
Even if a government-run system does come about, some investors aren't so sure it means UnitedHealth will lose. CAPS member reemiep thinks the insurer's experience in managing costs will allow it to beat the government at its own game.
The underlying expertise gained through years of managing the delivery of health care and the significant investment made to build a solid administrative and technological infrastructure will make UNH more than capable of competing with a government run health care plan. Government has proven time and again that it, more often than not, brings more inefficiencies to the table when it attempts to "manage" something more efficiently and effectively that the private sector. Its track record speaks for itself.
Action for action's sake
News of the Medarex buyout helped reverse investor disappointment over preliminary studies for Exelixis's most advanced drug under development, XL-184, a cancer therapy being developed with Bristol-Myers Squibb (NYSE: BMY ) . Shares soared for the biotech, perhaps on hopes someone would offer a pretty penny for Exelixis, too, but that enthusiasm was dampened a bit with a somewhat dour earnings report that didn't include any new agreements.
CAPS member Gametime25 is undaunted and feels that Exelixis's efforts in drug therapies means the Motley Fool Rule Breakers recommendation is a keeper.
Cancer seems to be a never ending situation, but everyone is trying there best to discover a cure to help those with cancer. I want to be optimistic and say that a cure will be found in a few months, and a year from now this company will out perform SP 500. If not though, this company is here to stay.
The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.
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