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If you are looking for momentum ideas, gain exposure to the healthcare sector and invest in companies with conservative accounting practices, this may be an interesting starting point for your own analysis.

To construct this list we look for stocks with the following characteristics:

  • Healthcare related companies with market cap above $300M
  • Trading above the 20-, 50-, and 200-day moving averages
  • And with conservative accounting practices, classified according to the ratings developed by forensic accounting firm Audit Integrity.




Audit Integrity was founded in 2002 to develop risk management tools based on a statistical analysis of corporate integrity. The Accounting and Governance Risk (AGR) rating is a forensic measure of the transparency and reliability of a corporation’s financial reporting and governance practices. The closer the score is to 100, the more conservative the company's accounting practices, according to Audit Integrity.

All the companies in this list have high AGR scores above 86, i.e. more conservative and transparent accounting practices than most other firms.

We also created an equal weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 (NYSEARCA:SPY) index over the last month. To access a complete analysis of this list's recent performance, click here.



Considering this data, which of these stocks are you most bullish about?

1. Volcano Corporation (NASDAQ:VOLC): Medical Appliances & Equipment Industry. Market cap of $1.37B. This stock is trading 2.63% above its 20-day MA, 2.2% above its 50-day MA, and 3.26% above its 200-day MA. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 97. The stock is a short squeeze candidate, with a short float at 6.8% (equivalent to 6.75 days of average volume). The stock has gained 21.4% over the last year.

2. Healthways Inc. (NASDAQ:HWAY): Specialized Health Services Industry. Market cap of $545.20M. This stock is trading 6.18% above its 20-day MA, 6.96% above its 50-day MA, and 25.78% above its 200-day MA. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 93. The stock has gained 0.31% over the last year.

3. Incyte Corporation (NASDAQ:INCY): Biotechnology Industry. Market cap of $2.40B. This stock is trading 9.45% above its 20-day MA, 24.17% above its 50-day MA, and 27.81% above its 200-day MA. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 91. This is a risky stock that is significantly more volatile than the overall market (beta = 2.39). The stock is a short squeeze candidate, with a short float at 11.22% (equivalent to 11.45 days of average volume).

4. Greatbatch, Inc. (NYSE:GB): Medical Appliances & Equipment Industry. Market cap of $629.10M. This stock is trading 3.68% above its 20-day MA, 5.73% above its 50-day MA, and 14.12% above its 200-day MA. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 90. The stock is a short squeeze candidate, with a short float at 9.18% (equivalent to 15.09 days of average volume). The stock has had a couple of great days, gaining 5.1% over the last week.

5. SIGA Technologies, Inc. (NASDAQ:SIGA): Drug Manufacturer. Market cap of $703.81M. This stock is trading 4.11% above its 20-day MA, 5.88% above its 50-day MA, and 21.64% above its 200-day MA. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 88. The stock is a short squeeze candidate, with a short float at 16.47% (equivalent to 13.89 days of average volume). The stock has gained 102.46% over the last year.

6. Chemed Corp. (NYSE:CHE)
: Home Health Care Industry. Market cap of $1.49B. This stock is trading 2.61% above its 20-day MA, 5.2% above its 50-day MA, and 15.64% above its 200-day MA. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 86. The stock has gained 30.08% over the last year.

*AGR scores sourced from Audit Integrity, moving average data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Momentum Ideas: 6 Rallying Healthcare Stocks With Conservative Accounting Practices