Q2 earnings season is over. And only one S&P 500 sector
consistently delivered shareholder returns: health care.
The health theme floated Medical Outpatient stocks into view.
This is a Baby Boomer industry. Its revenue charts seem to
replicate the aches and pains they're accumulating as they age. As
stocks look for direction, why not fall back on a tried and tested
theme like health?
Reflecting this, the Medical Outpatient - Health Maintenance
Industry climbed +1 position this week to sit at a very high Zack's
Industry Rank of #7 out of 265 industries. This 16 company industry
demonstrated 50 positive earnings estimate revisions compared to 7
negative revisions, with an average positive earnings per share
(EPS) surprise of +37%.
Seattle surgeon Mary Lee Peters MD had this to say --
"Those born between 1946 and 1964 constitute 28% of the U.S.
population. 76 million Boomers will hit 65 over the next two
decades, at a rate of 10,000 a day. Boomers account for half of
all consumer spending.
"The typical Boomer feels 9 years younger than their
chronological age, according to Pew Research Council data.
Elective cosmetic surgery is up +65% in this age group since
2005. Non-invasive plastic surgery procedures are up +87% in the
same time period.
"What is contributing to the upsurge in plastic surgery in this
"Boomers have chosen to redefine what it means to age. They are
re-inventing themselves. Sixty is their new forty. They pay more
attention to health, diet, exercise and general sense of
well-being. They are not afraid to spend money on improving
quality of life. They expect the quality of the last third of
their life to be high.
"For U.S. women, life expectancy has lengthened 34 years over the
last fifty years. But the focus for Boomers is not so much on
life span as it is getting to the end of their health span in
better shape. They are working longer than anticipated. Older
workers want to look better to fit in with younger co-workers.
Boomers want to stay active, relevant and engaged with society in
important ways. Their outlook on life is to do what they can to
enjoy the years they have left."
Two following corporations have been upgraded this week to a
Zacks Rank #1 (Strong Buy). An upward lift in rank from a Buy or
Hold to a Strong Buy signals a given stock may be on a path higher
following future positive earnings estimate revisions.
Research the four Zacks Rank factors when devising your
investment strategy. It can add understanding, both to fundamentals
underpinning company strategy and industry trends affecting similar
businesses. Medical Outpatient operators have been revised
upward by our system. Both stocks also hold a long-term Zacks
Pablo Picasso once said, "It takes a long time to become
Healthsouth Corp (
HLS holds a short-term Zacks Rank #1 rating. The company beat
consensus by +13% in its most recent earnings report. Consensus
pegs EPS growth in 2014 at +14% and 2015 at +8%. Revenue growth is
+5% in each year.
HLS is one of the nation's largest providers of outpatient
surgery and rehabilitation healthcare services. The company
provides these services through its national network of inpatient
and outpatient healthcare facilities, including inpatient and
outpatient rehabilitation facilities, outpatient surgery centers,
diagnostic centers, occupational medicine centers, and other
HLS is classified as a mid-cap growth stock. Its next EPS report
date is October 27th.
Chemed Corp. (
CHE holds a short-term Zacks Rank #1 rating. The company beat
consensus by +11% in its most recent earnings report. Consensus
sees no EPS growth in 2014 to be followed by +8% in 2015. Revenue
growth is 2% and 4% respectively.
CHE is the nation's largest provider of end-of-life hospice
services through it VITAS Healthcare Corp. subsidiary. Chemed also
maintains a presence in the residential and commercial
repair-and-maintenance industry through two subsidiaries.
Roto-rooter is North America's largest provider of plumbing and
drain cleaning services. Service America Network Inc. provides
major appliance and heating/air conditioning repair, maintenance
and replacement services.
Chemed is classified as a mid-cap growth stock. Its next EPS
report date is also October 27th.
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