The 10.0 Report

10.0 Report: Health Care Holds Top Spots


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We focus our attention on the top rated stocks of the market for a few simple reasons. The top stocks have the best earnings strength. The top stocks have strong fundamentals. And the top stocks are found in the top ranked industry groups. So from our perspective, the top stocks put the odds in our favor before we ever enter a buy order. So, why would anyone invest in anything else?

Each week the computers scour our universe of the most liquid stocks traded in the United States for the Top Stocks (the stocks with the top ratings in the top industry groups). But for this report, we are looking only for the absolute “the best of the best” — those stocks rated 10.0 out of a possible 10.0

Listed below are a few of the “10.0 Stocks” our team feels are worthy of attention for this week.

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Company Symbol Stock Rating Sector Industry Current Rating Trading Stop
Health Net Inc HNT 10.0 Health Care Managed Health Care Accumulate $46.89
Centene Corporation CNC 10.0 Health Care Managed Health Care Hold $89.89
Molina Healthcare MOH 10.0 Health Care Managed Health Care Buy $46.89
Humana Inc HUM 10.0 Health Care Managed Health Care Buy $129.29
WellPoint Inc WLP 10.0 Health Care Managed Health Care Buy $121.89

At the time of publication the editor and affiliated companies own the following positions: none

Note: Positions may be bought or sold while this publication is in circulation without notice.

Stock Rating:
The Top Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

Current Rating:
The Current Rating is designed to let readers know what we would do now if we did NOT currently hold the position.

  • Strong Buy: Our favorite position – We would be willing to buy a full position at current levels.
  • Buy: We would be willing to buy at current levels.
  • Accumulate: We would be willing to take a “starter position” (25% – 33% of the full position) at current levels. However, we would not want to buy a full position at the current time but would look to add to our “starter position” on weakness.
  • Hold: We prefer to hold our position at the current levels – but we would not be buyers at this time.
  • Sell: We are not happy with this position and are looking for an exit point.


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Do Ratings Really Matter?

We certainly think so, but sometimes it is best to let the numbers do the talking. Below is a table showing the average annualized returns for each rating category, as determined by historical testing done by one of the country’s largest independent institutional research firms.

Stock Rating Average AnnualReturn
9.0 – 10.0 +32.9%
8.0 – 8.9 +23.2%
7.0 – 7.9 +11.9%
6.0 – 6.9 +10.5%
5.0 – 5.9 +6.6%
4.0 – 4.9 +4.1%
3.0 – 3.9 +2.7%
2.0 – 2.9 -0.4%
1.0 – 1.9 -5.3%
0.0 – 0.9 -6.6%

The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of stateofthemarkets and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm as well as Heritage Capital Research (HCR). HCM is registered as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM, HCR nor Ridge are registered as a broker-dealer.

Employees and affiliates of HCM, HCR and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

The performance of the TopStock Ratings are linked monthly price changes of equal weighted hypothetical portfolios consisting of those stocks with the indicated Top Gun Rating assuming monthly rebalancing zero transaction costs. Results do not include dividends and are from the time period 12/31/95 through 6/30/02.

Index returns are price only and do not include the reinvestment of dividends. The S&P 500 is a stock market index containing the stocks of 500 large-cap corporations, most of which are US companies. The index is the most notable of the many indices owned and maintained by Standard & Poor’s, a division of McGraw-Hill. S&P 500 is used in reference not only to the index but also to the 500 companies that have their common stock included in the index.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

About the Author

David Moenning is the Chief Investment Officer at Sowell Management Services. Dave began his investment career in 1980 and has been an independent money manager since 1987. Thus, Dave has been live on the firing line and investing for a living for more than 29 years.