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Yahoo! Finance recently profiled 10 items many Americans purchase that have increased dramatically in price in the last decade. Using data from the Bureau of Labor Statistics' Consumer Price Index, they found that services provided by hospitals was high on the list, increasing 85% since the beginning of 2003. Other medical-related services have gone up as well, such as physicians' services (33%), but hospital prices grew the most in the medical-care service sector. This includes out-of-pocket expenses covered by health insurance billed by the hospital for accommodation, inpatient and outpatient services.

With hospital services improving in quality, and subsequently increasing in price, there may be opportunities for investors to take advantage in this growth in healthcare costs.

To create the list below, began with a universe of hospital companies, screening for those that are rallying above their 20-day, 50-day, and 200-day moving averages (MA). This indicates that these stocks have strong upward momentum.

We then searched the results for stocks that have outperformed the market over the last quarter, with quarterly performance above 15%.

From that screen we chose three stocks to examine in more detail, but also compared them with the only hospital stock that is both underperforming and trading below its 20-day, 50-day, and 200-day MAs.

The List

For an interactive version of this chart, click on the image below. Average analyst ratings sourced from Zacks Investment Research.

Do you think hospital operators make good investment opportunities? Use the list below as a starting point for your own analysis.

1. Health Management Associates Inc. (HMA): Engages in the operation of general acute care hospitals and other health care facilities in non-urban communities in the United States.

  • Market cap at $3.66B, most recent closing price at $14.13
  • Performance over the last quarter: 23.00%
  • 20 day MA: 17.55%; compared to industry average of 5.45%
  • 50 day MA: 20.63%; compared to industry average of 6.31%
  • 200 day MA: 45.38%; compared to industry average of 21.23%

HMA has recorded great gains over the last month, when compared to its closest competitors. The stock returned 24.64% since 5/10/13, better than Community Health Systems, Inc. (CYH) and Universal Health Services Inc. (UHS), which returned 8.09% and 3.74% during the same holding period.

The company has a projected earnings growth rate over the next 5 years of 11.32%, just above the industry average of 11.05%. This is still below the analyst projections for Vanguard Health Systems Inc. (VHS) (projected EPS growth over next 5 years at 11.56%) but better than UHS (projected EPS growth over next 5 years at 8.19%).

HMA is undergoing a change in leadership, after last month's announcement that CEO Gary Newsome will retire after July. The news has fueled takeover speculation, and during the week of the announcement the stock jumped 25%, pushing its price-earnings ratio to a high not seen since 2009.

2. Universal Health Services Inc. : Operates acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers, and radiation oncology centers.

  • Market cap at $6.95B, most recent closing price at $70.85
  • Performance over the last quarter: 16.59%
  • 20 day MA: 4.07%; compared to industry average of 5.45%
  • 50 day MA: 8.43%; compared to industry average of 6.31%
  • 200 day MA: 33.28%; compared to industry average of 21.23%

UHS has performed in line with the rest of its industry since 5/10/13, returning 3.74% over the last month. This performance has been better than HCA Holdings, Inc. (HCA) and Tenet Healthcare Corp. (THC), but worse than industry leaders like Health Management Associates Inc. and Community Health Systems, Inc. , which returned 24.64% and 8.09% respectively.

UHS has a lower than average projected earnings growth rate over the next 5 years (8.19%). This is lower than the analyst projections for CYH (projected EPS growth over next 5 years at 12.44%) and Select Medical Holdings Corporation (SEM) (projected EPS growth over next 5 years at 12.50%).

The company recently sold its Peak Behavioral Services facility, in Santa Teresa, NM, to Strategic Behavioral Health, LLC (SBH). The Federal Trade Commission approved the transaction as it meets the divestiture requirements UHS must adhere to after the company acquired Ascend Health Corporation last year.

3. AmSurg Corp. (AMSG): Engages in the development, acquisition, and operation of ambulatory surgery centers in partnership with physicians in the United States. At the end of 2012, the company operated 149 centers for gastrointestinal endoscopy procedures, 48 multi specialty centers, 36 centers for ophthalmology surgery procedures, and 7 centers for orthopedic procedures.

  • Market cap at $1.17B, most recent closing price at $36.50
  • Performance over the last quarter: 17.24%
  • 20 day MA: 1.84%; compared to industry average of 5.45%
  • 50 day MA: 6.19%; compared to industry average of 6.31%
  • 200 day MA: 18.66%; compared to industry average of 21.23%

AMSG has performed in line with the rest of its industry since 5/10/13, returning 1.36% over the last month. This performance has been better than HCA Holdings, Inc. and Tenet Healthcare Corp. , but worse than industry leaders like Community Health Systems, Inc. and Universal Health Services Inc. , which returned 8.09% and 3.74% respectively.

AMSG has a higher than average projected earnings growth rate over the next 5 years (14.50%). This is higher than the likes of HCA (projected EPS growth over next 5 years at 10.90%) and UHS (projected EPS growth over next 5 years at 8.19%).

The company's most recent earnings report included earnings per share above the same quarter last year, at $0.52, meeting analyst expectations. Revenue also met analyst estimates, increasing by 14% to $260.1M, thanks in large part to the acquisition of 17 centers last year.

The Laggard

Only one company in the hospital industry, Select Medical Holdings Corporation , is both underperforming based on quarterly performance, as well as trading below its 20-day, 50-day and 200-day MAs. Yet SEM has the second highest projected EPS for the next five years among its peers.

1. Select Medical Holdings Corporation: Through its subsidiary, Select Medical Corporation, operates specialty hospitals and outpatient rehabilitation clinics in the United States. As of the end of 2012, the company operated 110 long term acute care hospitals and 12 inpatient rehabilitation facilities in 28 states, as well as 979 outpatient rehabilitation clinics in 32 states and the District of Columbia.

  • Market cap at $1.10B, most recent closing price at $7.92
  • Performance over the last quarter: -7.72%
  • 20 day MA: -1.28%; compared to industry average of 5.45%
  • 50 day MA: -3.46; compared to industry average of 6.31%
  • 200 day MA: -12.42; compared to industry average of 21.23%

SEM has performed poorly since 5/10/13, especially when compared to industry competitors. The stock returned -2.83% over the last month, much lower than Community Health Systems, Inc. and Universal Health Services Inc. , which returned 8.09% and 3.74% during the same time period.

But SEM has a higher than average projected earnings growth rate over the next 5 years (12.50%). This is above the rate of Lifepoint Hospitals Inc. (LPNT) (projected EPS growth over next 5 years at 9.01%) and THC (projected EPS growth over next 5 years at 9.00%).

Institutional investors and insiders have contrasting views on the company, as Insider Monkey reports. The number of hedge funds with bullish views on SEM increased by nine recently, but at the same time there have been no insider purchases and eight insider sales in the last six months.

*All data sourced from Finviz.

Source: Healthcare Prices Continue To Grow: 3 Rallying Hospital Companies To Consider