The one-year stock price chart of WCG versus MOH shows both stocks are trading close to the 52-week highs.

WCG Chart WCG data by YCharts

WellCare is expected to finish 2013 with a similar annual EPS than it achieved last year. Revenue is expected to be up 26% from the previous year. WCG has a clean balance sheet with total cash per share as of the quarter ending June 30 of $34.59.

It appears that the promising prospects for Medicaid and Medicare insurers are already reflected at current price levels. Molina has had a great run with its share price up over 120% in the past 24 months. WellCare has done slightly less than half that well with about a 64% two-year price increase.

If the funding and demand for Medicaid increases in the year ahead there are reasons to anticipate more share price growth, especially if one or both companies declare a sustainable dividend.

WCG has a market cap of less than $3.2 billion. MOH is slightly more than half that size weighing in with a market cap of only $1.68 billion. Both these profitable companies may be takeover targets, but MOH seems particularly affordable to a big acquirer who see a synergistic fit.

If you plan to invest in both these collateral beneficiaries of Obamacare, consider scaling in gradually, buying a third or even half of a position size at a time. You might consider buying these two plus the third big name in this subsector, Centene ( CNC).

Analysts anticipate CNC to experience a 27% jump in EPS next year over this year. The St. Louis company hit a 52-week high on Friday Oct.4th and trades too rich for my appetite at a current PE of 48 and a forward (one-year) PE ratio of almost 19 times earnings.

I'd want to see it correct before I'd nibble on CNC, but MOH and WCG are ripe for scaling into and if shares drop, celebrate and buy some more.

Ready or not, here comes Obamacare, so investors might as well reap the benefits and the companies that will be as well.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Marc Courtenay is the founder and owner of Advanced Investor Technologies, LLC, as well as the publisher and editor of

Courtenay holds a Master's of Science degree in Psychology from California Polytechnic State University, and is a former senior vice-president of Investments for two major brokerage firms. He's been a fiercely independent investment "investigator" and a consulting contributor to the investment publishing world for over 30 years. In addition to his role as an investment publisher and analyst, he serves as a marketing consultant to the investment media industries.

In his role as a financial editor, he specializes in unique investment strategies, overlooked stock investments, energy and resource companies, precious metals, emerging growth companies, the prudent use of option strategies,real estate related opportunities,wealth preservation, money-saving offers, risk management, tax issues, as well as "the psychology of investing". Because of his training and background in Clinical Counseling and Psychology, he enjoys writing about investor behavior, the ┬┐herd mentality, how to turn investment mistakes into investment breakthroughs and the stock market's behavioral trends and patterns.

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