At www.ValuEngine.com we show that the Medical sector is 9.5% overvalued. The Nursing Homes industry is 26.2% overvalued. The Outpatient/Home Care industry is 9.4% undervalued. All eight of the stocks in today’s table have complete ValuEngine data and most have enough price data to have enough value levels, risky levels and pivots.
AdCare Health Systems Inc. (ADK) – has essentially been $6 for at least five years.
Addus HomeCare Corporation (ADUS) – has been below $9.75 for about three years.
Assisted Living Concepts Inc. (ALC) – plunged below $10 on August 7, 2012.
Concord Medical Services Holdings Ltd (CCM) – has below $10 since the week of February 5, 2010.
China Cord Blood Corporation (CO) – has been below $6.75 since the beginning of 2010.
Five Star Quality Care Inc. (FVE) – has been below $9 for at least five years.
RadNet, Inc. (RDNT) – has been below $10 since the week of November 16, 2007.
Skilled Healthcare Group, Inc. (SKH) – has been below $10 since the week of July 22, 2011.
Reading the Table
OV/UN Valued – The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine. The most overvalued stock in this table is FVE by 81.8%. The most undervalued stock is RDNT by 31.4%.
VE Rating – A “1-Engine” rating is a Strong Sell, a “2-Engine” rating is a Sell, a “3-Engine” rating is a Hold, a “4-Engine” rating is a Buy and a “5-Engine” rating is a Strong Buy. We have two buy rated stocks and six hold rated stocks.
Last 12-Month Return (%) – Stocks with a Red number declined by that percentage over the last twelve months. Stocks with a Black number increased by that percentage. The best performer over the past twelve months is FVE up 107.4%. The only loser was ALC down by 38.3%.
Forecast 1-Year Return – Stocks with a Red number are projected to decline by that percentage over the next twelve months. Stocks with a Black number in the Table are projected to move higher by that percentage over the next twelve months. These stocks are projected be up as much as 6.1% or down by 3.0%.
P/E Ratios – Six of the nine stocks have favorable P/E ratios, while ADK has a huge P/E ratio at 134.2.
Value Level: is the price at which to enter a GTC Limit Order to buy on weakness. The letters mean; 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.
Risky Level: is the price at which to enter a GTC Limit Order to sell on strength.
Where to Buy and Where to Sell
A “Value Level” is a price at which buyers should add to positions on market price weakness. A “Risky Level” is a price at which sellers should reduce holdings on market price gains. A “Pivot” is a support or resistance (Value Level or Risky Level) that was violated in its time horizon, acting as a magnet during the remainder of that time horizon. These levels are calculated in weekly (W), monthly (M), quarterly (Q), semiannual (S) and annual (A) time horizons, based on the past nine closes in each time horizon. My theory is that the closes over a nine-year period are the summation of all bullish and bearish events for that market or specific stock. These levels are the most important element of my Buy and Trade Strategy.
Buy and Trade Guidelines
Investors should consider entering good until cancelled (GTC) orders to buy weakness to a value level, or to sell strength to a risky level.