June 29, 2011 at 09:30 AM EDT
The Zacks Analyst Blog Highlights: WellPoint, Amerigroup, WellCare Health Plans, Magellan Health Services and Coventry Health Care

CHICAGO, June 29, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: WellPoint (NYSE: WLP), Amerigroup (NYSE: AGP), WellCare Health Plans (NYSE: WCG), Magellan Health Services (Nasdaq: MGLN) and Coventry Health Care (NYSE: CVH).

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Here are highlights from Monday's Analyst Blog:

HMO Stocks for Healthy Profits

An industry group with surprisingly steady profits from several players is that of HMOs. Big cap names like WellPoint (NYSE: WLP) have experienced frequent periods of upward earnings estimate revisions in the past year and watched their share prices surge 40% to 80%.

12th Out of 265 Industries

There are 18 companies in the Zacks HMO Industry group and, collectively, they have such strong earnings growth that they take the number 12 spot among 264 other groups. On Monday, there were five companies with the coveted Zacks #1 Rank (strong buy) including Humana and WellPoint, which just got bumped down to a #3 Rank (hold) today.

A handful of mid cap and small cap names in this space have also done well and may still be worth watching. They are listed below with market cap, forward P/E multiple, and performance.

Amerigroup (NYSE: AGP): $3.3 billion, 15 P/E; stock has consistently been a Zacks #1 or #2 Rank since August 2010 and it has doubled from $35 to $70.

WellCare Health Plans (NYSE: WCG): $2.1 billion, 13 P/E; stock has doubled from $25 to $50 since last July while earning a Zacks #2 or #3 Rank, with occasional #1 showings.

Magellan Health Services (Nasdaq: MGLN): $1.7 billion, 14.5 P/E; stock has moved from $35 to just over $50 in past year and recently began earning Zacks #1 and #2 Ranks since April.

Coventry Health Care (NYSE: CVH): $5 billion, P/E of 12; stock has consistently earned a #2 or #3 Zacks Rank, with occasional #1 showings in past year, and went from $17 to $35.

Part of Healthy Portfolio?

Based on the across-the-board outperformance of this group, it seems a solid HMO or two could find a welcome place in one's investments. Investors may want to consider a reliable large cap name and a higher-growth mid or small cap entrant.

The key to stock selection may rest with a combination of timing and successful identification of earnings growth and momentum. To get a quick and easy read on those profit metrics, you have to look no further than the Zacks Rank every day.

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Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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