This week, in our focus on the winning analysts in each industry category from our
Analyst Rankings -- Equity 2000, we profile the top analysts tracking managed health care stocks. Beginning in September, we turn again to the tech sector -- on Sept. 5, we look at analysts following telecommunications equipment names. (Our last focus was on
health care equipment and supplies.)
Managed health care has had an impressive run since January -- the group is up 39.7% vs. the
S&P 500 index's 1.5% gain. By contrast, last year's numbers told a very different story: The sector was down 12.1% in 1999, while the S&P advanced 19.5%.
If the group is doing so well, why are all of our winning analysts choosing their companies so carefully? Two words: rising costs.
Medical costs have continued to rise at an alarming rate, forcing insurance companies to raise premiums. With costs spiraling out of control and public opinion of managed care at an all-time low, our analysts urge investors to focus on companies that have disciplined business practices and strong market positions. They warn investors to be wary of companies that are overly exposed to Medicare and to small employer groups.
The ground shifts quickly in this sector, and our top three analysts do not always share a consensus on even the leading names in the group. For example,
UnitedHealth (UNH Quote - Cramer on UNH - Stock Picks), the top choice of first-place winner Roberta Goodman and second-place winner Christine Arnold, was recently downgraded by third-place finisher Joseph France. The stocks all three analysts like:
Cigna(CI Quote - Cramer on CI - Stock Picks) and
WellPoint Health Networks(WLP Quote - Cramer on WLP - Stock Picks).
Managed Health Care  | 4th Place |
James Lane
Salomon Smith Barney |
| | 5th Place |
Charles Boorady
Goldman Sachs |
| | Best Team |
| Morgan Stanley Dean Witter |
Rate Their Stock Picks: Which stock do you like best? Goodman and Arnold: UnitedHealth Group France: Cigna 
TSC Staff
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