2 Health Care Stocks Hitting 52-Week Highs: MHS, ISRG

NEW YORK ( TheStreet) - Medco Health Solutions ( MHS) and Intuitive Surgical ( ISRG) both hit 52-week highs on Monday.

Both stocks are rated buy at TheStreet Ratings.

Medco Health Solutions

The pharmacy benefit manager got a boost as expectations grew that it would be able to complete its planned merger with Express Scripts ( ESRX), according to The Wall Street Journal, which cited a report by anti-trust research firm MLex as saying it expects the combination to win anti-trust approval.

The company also reported its above-consensus fourth-quarter earnings last week.

"New business trends were more positive than we expected, as the company has won $2.6 billion in gross new business in 2012," William Blair analysts wrote in a Feb. 21 report. "While net new wins are still negative for the year (given previously disclosed losses), there have been no new significant losses since the third-quarter call, suggesting net new business wins over the past three months were also about $1 billion."

Shares of Medco Health Solutions hit a 52-week high of $68.40. The stock's 52-week low of $44.60 was set on Oct. 4.

Medco Health Solutions has an estimated price-to-earnings ratio for next year of 14.06; the average for health care providers is 18.75. For comparison, both WellPoint ( WLP) and Express Scripts ( ESRX) have lower forward P/Es of 7.77 and 12.8 respectively.

Twelve of the 22 analysts who cover Medco Health Solutions rate it at buy; 10 analysts give the stock a hold rating.

TheStreet Ratings gives Medco Health Solutions a B grade with a buy rating and $73.98 price target. The stock has risen 19.3% year to date.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Intuitive Surgical

Last month, the maker of the da Vinci robotic surgery system reported fourth-quarter earnings of $151.2 million, or $3.75 a share, easily beating Wall Street's expectation for a profit of $3.35 a share.

"We believe that the company can sustain 20% topline growth and operating margins for the next three to five years given the many layers of growth we discussed in our recent Update Report," William Blair analysts wrote in a Feb. 2 report. "Therefore, investors should maintain positions--and add more aggressively on pullbacks--despite a premium valuation (33 times our GAAP 2012 EPS of $14.35 and 28.7 times cash EPS of $16.85) and we rate the stock Outperform."

Shares of Intuitive Surgical hit a 52-week high of $518.47.The stock's 52-week low of $315.01 was set on March 16.

Intuitive Surgical has a forward P/E of 31.02; the average for medical equipment companies is 30.24. For comparison, both Medtronic ( MDT) and St. Jude Medical ( STJ) have lower forward P/Es of 10.25 and 11.61 respectively.

Ten of the 17 analysts who cover Intuitive Surgical rated it hold; seven analysts gave the stock a buy rating.

Intuitive Surgical gets an A- grade from TheStreet Ratings with a buy rating and $664.60 price target. The stock has increased 11.76% year to date.

-- Written by Alexandra Zendrian in New York.

>To contact the writer of this article, click here: Alexandra Zendrian

>To submit a news tip, send an email to: tips@thestreet.com.

>To follow the writer on Twitter, go to Alexandra Zendrian.

More from Investing

Immigration, Instagram and Oil - Here's What You Can't Miss Wednesday

Immigration, Instagram and Oil - Here's What You Can't Miss Wednesday

REPLAY: Jim Cramer on Fed Rate Hikes, Oil Prices and Starbucks Worries

REPLAY: Jim Cramer on Fed Rate Hikes, Oil Prices and Starbucks Worries

What Will GM Do With Cruise -- and Is Its Stock Worth $55?

What Will GM Do With Cruise -- and Is Its Stock Worth $55?

3 Must Reads on the Market From TheStreet's Top Columnists

3 Must Reads on the Market From TheStreet's Top Columnists

This Should Be Your Retirement Savings Plan When the Stock Market Crashes

This Should Be Your Retirement Savings Plan When the Stock Market Crashes