Checking The Pulse Of Healthcare Stocks

Includes: ABT, ANTM, STJ, SYK
by: Stock Traders Daily

By Billy Fisher, Stock Traders Daily

The first couple of days this week will give traders the opportunity to look into taking positions in several notable healthcare companies that will be releasing earnings on Wednesday. The results themselves should give traders a good indication of what the sector will be facing for the balance of the year. With that said, Stock Traders Daily offers these four trades to ponder.

Vital Signs

After the closing bell on Wednesday, analysts will be expecting the medical device maker Stryker Corporation (NYSE:SYK) to report a 9.8% improvement in EPS on a 3.5% uptick in sales when compared to the prior year quarter.

This is a great company, but traders going long into the release may be setting themselves up for disappointment. Long term, Stryker may trend higher, but in the short term I see it cooling off a bit. It has already run up 12.3% since the beginning of the year. It's time to take some off the table.

Prior to the market open on Wednesday, St. Jude Medical (NYSE:STJ) will unveil the results of its Q4. The consensus on Wall Street is that the company will check in with EPS of $0.89 versus $0.86 in the prior year quarter. Total revenue is expected to decline by 2.5%. The company has seen a great deal of strength from its atrial fibrillation unit recently which could help to contribute to an earnings beat of a penny or more. I like the name heading into Wednesday.

M&A Momentum

One of the nation's largest health insurance providers will also release its Q4 results on Wednesday. Before the opening bell, analysts are calling for WellPoint (NYSE:WLP) to report EPS of $0.95 compared to $0.99 in the year-ago quarter. Total revenue is expected to improve by 0.7%.

The company made some notable acquisitions in 2012 including Amerigroup and 1-800 CONTACTS and its stock price has been picking up steam as of late. If the company can post a beat as it did in Q3, the stock should be able to maintain its recent gains and set the table for longer term growth as these acquisitions become fully integrated.

One other name for traders to watch heading into Wednesday is Abbott Laboratories (NYSE:ABT). Analysts are predicting that the company will report a 3.4% upswing in EPS on a 1.9% advance in total revenue when compared to the prior year quarter. The company has surprised to the upside in each of its last four quarters and I see it happening once again. The technicals are great on this stock - it is heading higher.

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

Business relationship disclosure: This article was written by Billy Fisher, and neither Billy Fisher or Stock Traders Daily receive compnsation from the companies mentioned in this article for writing this article.

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