(UNH - Get Report)
is one of the biggest health care names in the country, covering the health policies of more than 77 million Americans. Scale matters in the health insurance business, and UNH has no shortage of scale. After all, when you insure one-in-four Americans, you've got considerable pricing power over medical providers. That, in turn, drives cost-conscious corporate benefits departments to turn to UNH's network for their employees.
Increasingly, UNH is earning its keep not by insuring Americans' health but instead by administering employers' self-insured policies. That's a very good thing for UnitedHealth because it gives the firm a consistent revenue stream without exposure to the possibility of mispricing policy risks. Instead, employers bear the burden of costs while UNH gives them access to a pre-existing network infrastructure. That's an attractive tradeoff for insurers following recent health care reforms.
Some health care reform legislation stands to benefit UNH more directly, though. One big benefit is increased Medicaid expansions that will enable UNH to earn bigger subsidies for patient care. With a solid financial footing and rising analyst sentiment this week, we're betting on shares.
2013 is panning out to be a strong year for
(OMC - Get Report)
. Since the first trading day of January, shares of the $15 billion advertising firm have climbed 14.5%, besting the broad market by a wide margin. Omnicom is unique in that it's a publicly traded collection of advertising and marketing agencies. The firm serves more than 5,000 clients worldwide, creating ad spots during the Super Bowl, on regular TV lineups, in print and online.
Some of the most prominent ad agencies in the world, including DDB and BBDO, fall under the Omnicom umbrella, factors that give OMC a big advantage in a saturated industry where reputation counts. Advertising is one space where customers are willing to go with pricier vendors if the level of creativity justifies the price tag. That makes human capital extremely important for OMC. If it loses its talent, it loses its edge. While that makes talent retention a high priority, stellar reputations at OMC's agencies make hanging onto skilled salespeople and creatives that much less difficult.