(Health care winners story updated with HMS Holdings, closing prices and trading)

NEW YORK ( TheStreet) -- Hospital stocks were among the biggest gainers in 2009 as health reform came into focus. On Monday morning -- with that more than year-long focus finding the light of legislative day, hospital stocks were again popping. How much is there really to pop, though, in stocks already trading near 52-week highs as a result of the 2009 run-up?

In fact, a good question for investors to separate the health care reform noise from the facts is that the entire health care sector was trading throughout 2009 based on the argument that health care reform would become a reality in 2010.

Take Tenet Healthcare ( THC). Tenet was the No. 1-performing stock in the S&P 500 last year.

Healthcare analysts had indicated as 2009 drew to a close that the question with regards to the hospital stocks was if they had become frothy, or if there was still room to grow in 2010. The expectation at that point, of course -- pre-Scott Brown -- was that health-care reform would pass, for sure.

Now that health care reform looks to be a done deal, some analysts are out early on Monday pushing hospital stocks up again.

JPMorgan Chase put out a note arguing that while managed-care stocks are expected to be hit the hardest as a result of reform, the hospital stocks and Medicaid coverage providers will be winners.

Still, in the case of hospital stocks, a boost in coverage won't begin to result in hospital increased inflows until 2014. JPMorgan referred to these hospital stocks, including Tenet, as "clear, eventual" winners, meaning the benefits won't arrive until 2010. Given that these hospital stocks are already at or near 52-week highs, should eventual gains be the trigger for another rally now?

The answer to this question is yes, apparently.

Tenet Healthcare ( THC) closed up more than 9% on Monday , with more than 34 million shares traded of the hospital stock -- versus an average daily volume 9.6 million shares traded.

Health Management Associates ( HMA) ended up 11%, with more than 20 million shares traded, versus an average volume just under 4 million shares traded daily.

In comparison to these hospital stocks, the health care sector was only up 0.7% on Monday.

JPMorgan indicated that Amerigroup ( AGP), Centene ( CNC), and Molina Healthcare ( MOH) were among the Medicaid providers that would benefit from the reform effort becoming the law of the health care land.

On the Medicaid provider front, Centene ( CNC) ended Monday up close to 11%, and its Monday volume of 3.3 million shares traded was six times its average trading volume of 550,00 shares.

Centene, though, unlike the Tenet and HMA, was on a trough trend for much of 2010, with shares falling as low as $17.87 in late January. Centene shares gained $2.31 on Monday, to close at $24.14, and the stock hit several 52-week high points during Monday's session before closing 8 cents below the new high of $24.22.

HMS Holdings ( HMSY) was among the big winners in Medicaid-related stocks, finishing Monday up more than 9%, or $4.40, to $53.28. HMS' 52-week high was also achieved intra-day on Monday at a share price of $54.07.

Amerigroup was 4.6% on Monday. Molina finished up 3.5% at the close on Monday, but in the after hours session, had declined by an equal amount to its daily gain.

Other hospital stocks joining in the Monday health care winners rally were Community Health Systems ( CYH), Lifepoint Hospitals ( LPNT) and Universal Health Services ( UHS).

Community Health Systems and Universal Health both finished Monday up approximately 6% and, as in the case of the other health care winners, reached intra-day 52-week highs on Monday. Lifepoint was up close to 6%, with a gain of more than $2 on the day to $37.91, and also reached a 52-week high earlier on Monday.

Lazard Capital noted in a research piece on Monday morning that the health care reform bill "impacts sentiment more than fundamentals" in the short term for health care facilities stocks, noting that many of the changes won't take place until 2014 at the earliest.

Nevertheless, the Lazard analyst Tom Gallucci wrote, "On the surface the passage of the bill by the House lends an element of increased certainty for now in terms of the playing field for health-care providers." Lazard reiterated its buy rating on Community Health Systems.

Pharmaceutical stocks like Merck ( MRK) and Pfizer ( PFE) were also up, but with more modest gains on Monday that couldn't be compared to the rally in he hospital and Medicaid-focused stocks.

Prescription benefit manager Express-Scripts ( ESRX) was also up, but its gain of 1.4% was not among the health care rally leaders, and its trading level was average.

The certainty for playing health care seemed to be win out over any fears about the lack of impact on health care fundamentals on Monday. That might indicate that risk-averse investors who had been on the sidelines for all of 2009 as a result of the uncertainty are now putting their money back into the health care sector, or some short-term traders were taking advantage of opportune timing; probably some of both trends, actually.

Still, with benefits from the health reform package years out, and many of these stocks trading near 52-week highs for months now, the certainty provided with the health care reform victory for President Obama doesn't mean there should be certainty among investors about how much room there is to rally in these stocks before the sentiment becomes frothy. -- Reported by Eric Rosenbaum in New York

>>See our new stock quote page.

Follow TheStreet.com on Twitter and become a fan on Facebook.
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

If you liked this article you might like

4 Stocks Rising on Unusual Volume

4 Stocks Rising on Unusual Volume

Community Health Inks Favorable Terms on M&A Debt

Community Health Inks Favorable Terms on M&A Debt

Trade-Ideas: Health Management Associates (HMA) Is Today's "Barbarian At The Gate" Stock

Trade-Ideas: Health Management Associates (HMA) Is Today's "Barbarian At The Gate" Stock

4 Stocks Rising on Big Volume

4 Stocks Rising on Big Volume

Today's Pre-Market Mover With Heavy Volume: Health Management Associates (HMA)

Today's Pre-Market Mover With Heavy Volume: Health Management Associates (HMA)