A number of stocks in the health care sector are up over 12 months, and according to GuruFocus research, the billionaires are trading. The GuruFocus Buffett-Munger Screener highlights these medical and health care companies, and others, with high predictability and EBITDA growth rates.
LifePoint Hospitals Inc. (LPNT)
EBITDA: 239.1% 12-month Growth Rate
LifePoint Hospitals Inc. (LPNT) is up 24% over 12 months. The company has a market cap of $2.3 billion; its shares trade at around $48.37 with a P/E ratio of 18.00 and P/S ratio of 0.50.
Founded in 1999 with 23 hospitals, LifePoint Hospitals, based in Tennessee, has become a leading hospital company with more than $3.5 billion in revenues and nearly 60 hospital campuses in 20 states. The company has more than 28,000 employees and 3,000 physician partners.
For the second quarter ending June 30, 2013, the company reported revenues from continuing operations were $894.9 million, up 8.2% from $827.3 million for the same period a year ago. Income from continuing operations attributable to LifePoint Hospitals Inc. stockholders for the second quarter ended June 30, 2013, decreased 32.6% to $27.1 million, or $0.57 per diluted share, compared with $40.2 million, or $0.83 per diluted share, for the same period a year ago.
Guru Action: As of June 30, 2013, Diamond Hill Capital sold 3,955 shares at an average price of $47.94 for a gain of 0.9%. Diamond Hill’s five-year trading history shows only gains since it first bought in the third quarter of 2008.
Diamond Hill Capital has averaged a gain of 63% on 675,200 shares bought at an average price of $29.73.
WellPoint Inc. (WLP)
EBITDA: 14.7% 12-month Growth Rate
WellPoint Inc. (WLP) is up 52% over 12 months. The company has a market cap of $26.03 billion; its shares trade at around $87.06 with a P/E ratio of 9.90 and a P/S ratio of 0.40.
Incorporated in 2001, WellPoint Inc. is a health benefits company with a commercial membership of approximately 34.3 million medical members. The company offers a spectrum of network-based managed care plans to large and small employers, individuals, and Medicaid and senior markets. WellPoint and its affiliated health plans have created a variety of PPOs, HMOs and specialty network-based dental and health care services.
At the end of July, WellPoint Inc. reported a second quarter 2013 net income of $800.1 million, or $2.64 per share. The company’s net income in the second quarter of 2012 was $643.6 million, or $1.94 per share.
Guru Action: While Gurus were split on WLP in the first quarter, top Guru shareholder Vanguard Health Care Fund with 2.53% of shares outstanding, made a 16.8% gain on its holding of 7,702,400 shares in the second quarter. Donald Yacktman also gained 16.8% buying 2,625 shares at an average price of $74.84 in the second quarter. He has averaged a gain of 49% on 3,642,814 shares bought at an average price of $58.70.
Steven Romick also gained 16.3% on his holding of 2,395,000 shares at an average price of $60.63 in the second quarter. He has averaged a gain of 44% on 2,395,000 shares bought at an average price of $60.63.
Here is more Guru WLP trade activity.
UnitedHealth Group Inc. (UNH)
EBITDA: 10.8% 12-month Growth Rate
UnitedHealth Group Inc. (UNH) is up 38% over 12 months.
The company has a market cap of $74.38 billion; its shares trade at around $72.92 with a P/E ratio of 13.70 and a P/S ratio of 0.70.
Incorporated in 1977, UnitedHealth Group is a diversified health care company in the U.S., serving more than 85 million individuals worldwide with health benefits and services. The company has operations in all 50 states in the U.S. and 20 other countries worldwide.
In 2102, UnitedHealth reported revenue of $110.6 billion. In mid-July, the United Health Group reported second quarter 2013 revenues exceeded $30 billion, increasing 12% year-over-year. In second quarter, United Healthcare customers grew from 30 million to 45 million. The company’s Optum revenues were $8.8 billion, up 21%, and its Optum operating earnings grew 68% year over year. UnitedHealth Group net earnings of $1.40 per share also increased 10% year over year. The company affirmed its projections for 2013 revenues of approximately $122 billion and cash flows from operations in a range of $7.2 billion to $7.6 billion, and tightened its outlook for full year 2013 net earnings to a range of $5.35 to $5.50 per share, according to a company press release.
Guru Action: In second quarter, Scott Black sold out his holding of 33,362 shares for a gain of 17.2%, while Vanguard Health Care Fund bought 740,800 shares at an average price of $62.22 for a 17.2% gain.
Vanguard has averaged a gain of 84% on 21,460,200 shares bought, and a gain of 146% on 1,500,000 shares sold. The trading history is all high gains.
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