NEW YORK ( TheStreet) -- The Supreme Court will announce its decision on the constitutionality of Obamacare Thursday. In case you don't remember, the real name of the bill is "Patient Protection and Affordable Care Act." From different surveys I have read, it appears there's a 75% chance that the individual health care mandate in the act will be ruled unconstitutional. ValuEngine shows that the Medical Sector is 7.4% overvalued, but within that sector, the Health Maintenance Organizations Industry is 5.6% undervalued. I will evaluate the price performance of nine stocks in this industry focusing on the volatility since March 26, when the Supreme Court began deliberating on Obamacare.
All nine of the stocks I profile are rated Strong Buy or Buy according to ValuEngine, and all but one traded lower during the period of deliberation by the Supreme Court. Those that have moved lower have been hurt by the general uncertainty about the outcome, and may have higher costs to adjust to the outcome. Here's a table of information from www.ValuEngine.com include my value levels, pivots and risky levels.
Definitions of the Columns
OV/UN Valued: Red is the percent undervalued. Black is the percent overvalued. The most undervalued stock is Health Net ( HNT), at 23.5% undervalued. The most overvalued is Coventry Healthcare ( CVH), at 14.6% overvalued. VE Rating: 5-Engine is Strong Buy. 4-Engine is Buy. The Strong Buys are Aetna Inc ( AET), UnitedHealth Group ( UNH), Wellcare Health ( WCG) and Wellpoint Inc ( WLP). Last 12-Month Return (%): Red is negative. Black is positive. UNH is the only stock on the list to post a price rise over the past twelve months with a 17.8% gain. Forecast One-Year Return: Since they are all rated Buy or better, the upside projection is in black. Those with a projected gain of 12% or more garner the 5-Engine, Strong Buy rating. P/E Ratios: The price-to-earnings ratios range from 7.1 to 22.4. Value Level: The price at which to enter a good 'til canceled limit order to buy on weakness (W-Weekly, M-Monthly, Q-Quarterly, S-Semiannual and A- Annual) Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.