NEW YORK (TheStreet) -- On July 3 we learned that the implementation of the employee mandate of the Affordable Care Act or Obamacare would be delayed until January 2015. The delay provision involved employers with more than 50 employees where health care coverage was mandated to begin in January 2014, or the company would face paying a fine based upon the number of employees.
On July 9 I wrote
and since then the seven stocks I profiled moved sideways to up with gains between 2.4% and 25.7%.
Registrations began Tuesday the health care exchanges which take effect in January 2014. Folks who are already covered under existing health plans should be able to keep their current plans, as long as the employers keep plans in place, which is no sure thing. Many companies have chosen to convert full time employees to part time by cutting hours worked to 29 hours. These employees must eventually register on the health care exchanges.
ValuEngine shows that the medical industry is 23.5% overvalued with the health maintenance industry 21.2% overvalued. I continue to give the medical sector an equal-weight asset allocation rating.
On July 8 there was only one buy rated stock among the seven health maintenance organizations I chose to profile for buy-and-trade investors. Today two other stocks among these seven have buy ratings. All are overvalued by 6.1% to 40.6% and have posted solid gains of 27.8% to 76.7% over the last 12 months. All are above their 200-day SMAs, which reflects the risk of reversion to the mean.
Reading the Table
Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.
A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.
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Last 12-Month Return (%):
Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.
Forecast 1-Year Return:
Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.
A level between a value level and risky level that should be a magnet during the time frame noted.
Price at which to enter a GTC limit order to sell on strength.
($64.76 vs. $63.26 on July 8): set a new multi-year high at $69.19 on Sept. 16. The stock had a hold rating in July and now has a buy rating. My annual value level is $62.77 and a quarterly pivot at $65.82 and monthly risky level at $70.72.
($64.30 vs. $54.49 on July 8): tested and held its 50-day SMA at $57.46 on Sept. 23 then traded to a new multi-year high at $65.05 on Oct. 1. My monthly value level is $63.01 with a quarterly pivot at $65.01.
($32.87 vs. $32.07 on July 8): set a new multi-year high at $33.90 on Sept. 16. My weekly value level is $31.23 with an annual pivot at $32.54 and annual risky level at $35.35.
($94.87 vs. $84.27 on July 8): set a new multi-year high at $99.85 on Sept. 16. Humana has maintained a buy rating since July 8. My annual value level is $91.58 with a weekly risky level at $98.67.
($72.57 vs. $67.56 on July 8): set a new multi-year high at $75.88 on Sept. 16. My annual value level is $62.39 with a semiannual pivot at $73.01 with a monthly risky level at $75.13.
WellCare Health Plans
($72.71 vs. $57.86 on July 8): set a new multi-year high at $73.02 on Oct. 2. My annual value level is $69.44 with a semiannual pivot at $72.05 and quarterly risky level at $81.04.
($86.60 vs. $83.09 on July 8): set a multi-year high at $90.00 on July 24, which was nearly retested on $89.93 on Sept. 16. Wellpoint was rated hold back on July 8 and today has a buy rating. My semiannual value level is $83.77 with a weekly pivot at $85.43 and monthly risky level at $90.30.
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Suttmeier is the chief market strategist at AlphaPlus Analytics in addition to ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.
Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.
Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.
Click here for details on Suttmeier's "Buy and Trade" investment strategy.
Richard Suttmeier can be reached at RSuttmeier@Gmail.com