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Medicals Top Steady Price, Profit Histories By IBD STAFF

If you thought medical stocks tend to be less volatile in price action and earnings performance, a bit of research confirms that notion.

IBD screened for stocks with the steadiest earnings performance over the past three years plus low betas (which measure price activity in relationship to the S&P 500).

Specifically, the EPS Stability Ratings for this research were 5 or less, and the betas were 0.75 or less.

Of 12 stocks that qualified, eight were in health care.

PSS World Medical (PSSI) corrected a relatively moderate 39% in the bear market. Its earnings results haven’t been so steady, ranging from flat to 47% the past eight quarters. Still, the medical products and equipment distributor earns a 93 EPS Rating.

Hospital company Universal Health Services (UHS) has posted EPS gains of 9% to 35% the past eight quarters. It’s near a new high after plunging 56% last autumn.

Medco Health Solutions (MHS), the pharmacy benefits management firm, has made calm price moves, aside from sharp volatility last October and in February.

Cerner (CERN) makes software for medical records and doctors’ office management. Its EPS gains ranged from 8% to 33% the past 12 quarters.

Qiagen (QGEN) is a Dutch company that develops tests for the virus responsible for cervical cancer. It also makes products for diagnostic labs, researchers and for other fields.

Other medicals were Kinetic Concepts (KCI), Beckman Coulter (BEC), and Hospira (HSP).

The nonmedical stocks in the screen were Check Point Software (CHKP), O’Reilly Automotive (ORLY), J.M. Smucker (SJM), and BMC Software (BMC).

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September 15, 2009 - Posted by | Uncategorized

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