The Healthcare Information Services sub-sector will be a direct benefactor of President Obama's Stimulus Plan. The stocks in this sub-sector which should benefit are Athenahealth, Inc (ATHN), McKesson Corp (MCK), Allscripts-Misys Healthcare Solutions, Inc (MDRX).
One of President Obama's goals is to automate healthcare records, which would lead to saving billions of dollars of Medicare in the future. One stock poised to benefit is ATHN. This Internet-based services provider for physician practices is a solid stock poised to benefit from increased spending on healthcare information technology.
The company's flagship product is a software product called Athena Collector, which automates and manages billing-related functions and includes a medical practice management platform. Founded in 1997, and with a market capitalization of $1.24 billion, ATHN definitely qualifies as a small-cap company. However, there are plenty of reasons why investors can expect big things from this modestly sized stock.
Shares of ATHN outperforming the equity Indexes, stock is up 16.5% during the past 52 weeks. ATHN has consistently beaten the S&P 500 Index on a relative-strength basis since the end of April 2008. Recently, ATHN had moved through short-term resistance at the 36 level but is now parked just under that 36 level at 35.48, thanks in part to a technical boost from its rising 10-week and 20-week moving averages.
The next big resistance potential resistance obstacle for the shares lies well overhead at 40, which is the site of the stock's annual high. This looming resistance could provide a challenge for the stock during the short term, ATHN could potentially benefit as more and more Wall Street players are drawn to its bullish bandwagon.
Currently Zacks reports that 6 of the 11 analysts currently following the stock consider it worthy of just a lukewarm "hold" rating. Any upgrades from this skeptical bunch could draw new buying pressure to the shares. Short interest accounts for 13.3% of the equity's available float, or 7.8 times its average daily trading volume. If these skeptics are spooked into buying back their bearish bets, it could help ATHN extend its recent uptrend. Any upward revisions to this consensus estimate could also provide a boost.
Each of these stocks have already had a nice run up from there recent lows. I would look to buy ATHN and MDRX on a pull back. I would look for a shallow 38.2% Fibonacci retracement to enter these stocks. For ATHN that level is at about 32 and MCK the level is about 39.50. However if MDRX pushes through resistance at about 10 dollars and closes above 10 with increasing volume I will be a buyer on the break higher. The next resistance overhead comes in between 13-14 level.
