There is a difference between a great company and a great investment. Though they are many times one and the same, a great investment comes from paying the right price for a business that you understand. More often than not, the right price presents itself when short-term business issues distract the market from the true value of the business.

Pfizer (PFE) is a longtime industry leader, though not exactly “great” today. Its number one issue is the impending loss of Lipitor and the lack of meaningful late stage pipeline candidates to replace that significant loss.

UnitedHealth Group (UNH) is a strong franchise that benefits from the increasingly important role that managed care plays in the health care industry. The advantages of scale and local market share leadership are the foundations behind UnitedHealth’s position. At current prices in the low $30s, the market is severely underestimating the value of this business.

It is one of two dominant publicly-traded managed care companies (Wellpoint being the other). UnitedHealth is ranked #2 in terms of national membership and #1 in terms of revenue, enabling it to benefit from these benefits of scale. Scale matters in managed care as a large supplier base of doctors, specialists and hospitals makes it more worthwhile for new individuals to become members. As the plan grows its membership, it increases its power to control costs over its suppliers, as they have to contract with the plan in order to access the growing member base. The lower costs that come from these measures help to moderate premium rate growth, making the plan even more appealing to prospective members.

Affiliated Computer Services (ACS) provides business process outsourcing and IT outsourcing services for commercial and government clients.