Universal Health Services is engaged principally in owning and operating acute care hospitals, behavioral healthcenters, ambulatory surgery centers and radiation oncology centers. For the fiscal year ended 12/31/00, revenues rose 10% to $2.24B. Net income rose 20% to $93.4M. Revenues reflect 17 new facilities and growth at acute care and behavioral care facilities. Net income reflects lower depreciation expenses as a percentage of sales.

March 15, 2001

UHS is a major hospital owner and operator that is best known for its acute care and behavioral health centers. UHS peaked at $112.93 at the end of December. Although the stock has been a somewhat lackluster performer since that time, we believe now is an excellent time to try and snag some profits for two reasons. First, UHS appears to have successfully tested its 200-DMA of $80.00 this week. This event is technically significant and many value investors (and there are a lot of them these days) look for these type of bounces before entering a position. Second, UHS is a viable split candidate because the stock is trading at prices well above those when the stock last split. The most recent split occurred during the spring of 1996 when the stock was trading at $56.38. The OBV and Money Flow are both starting to turn back positive, which is another good sign that UHS has found support and is ready to go higher. The RSI is starting to move back up from a mild oversold indication. This fact gives UHS a lot of room to rally before an overbought condition is threatened. Some traders may be interested in picking up the stock if UHS can trade above $83.75 with midday volume near 150,000 shares.

Picked on March 15th @ $83.50
Change since picked +0.00
Stop Loss @ $80.00

March 22, 2001

There was nowhere to run and hide for members of the NYSE this morning. Even UHS, a major owner and operator of hospitals that has been recently attracting the value-oriented crowd, saw share price declines. Despite today's pullback, UHS appears to have put in an important bottom by finding support at its 200-DMA. This highly watched moving average closed today at $80.66. We also like the strong possibility that UHS may be on the verge of announcing a split. Previous splits occurred when the stock was trading at levels substantially below today's closing price. The strong market recovery into the close may help UHS to start moving back up tomorrow. We are encouraged by the fact that the MACD is very close to issuing a buy signal. That said, we are comfortable adding positions if UHS can stay above the 200-DMA, just in case there is some weakness in the early going. Otherwise, momentum traders may be interested in buying UHS if it can climb above the 50-DMA of $85.19, accompanied by volume that approaches 350,000 shares near the close.

Picked on March 15th @ $83.50
Change since picked -1.45
Stop Loss @ $80.00

March 20, 2001

UHS was very strong for most of the day. In fact, the stock was able to hold off the selling hordes for all but the last half hour of trading. It almost appeared as if traders said, "What can we sell next?", and finally knocked UHS down a little bit. Nevertheless, UHS continues to look like a stock that value investors will keep buying when the market fear levels subside. Before the market collapsed, UHS was making a technically significant move, crossing over its 50-DMA, which closed today at $85.38. Although UHS closed below this moving average, the stock's uptrend remains intact because it stayed above yesterday's low of $82.00 and moved above yesterday's high of $86.00 during intra-day trading. If we see early weakness tomorrow, traders may consider picking up UHS if it stays above $82.00. Another good entry point may present itself if UHS can close above the 50-DMA accompanied by volume over 300,000 shares. If this move occurs, the MACD will likely issue a buy signal. This would be an encouraging event that would imply the continuation of the stock’s advance.

Picked on March 15th @ $83.50
Change since picked +0.09
Stop Loss @ $80.00

March 18, 2001

UHS, an owner and operator of 47 hospitals, attracted a fair amount of value investors last week. At first glance, a positive move of less than a point for the whole week may be unimpressive. However, when one considers the huge declines seen by a multitude of stocks over the last week, UHS' positive move tells us that the stock is developing some nice relative strength. It is technically significant that UHS bounced off its 200-DMA, which closed the week at $80.09. A sustained bounce off the 200-DMA is a good sign that a stock has found a bottom and will likely trend higher. Addition, it appears as if UHS is headed towards putting in a triple bottom formation. UHS is also tempting because it is a split candidate. The company's last split was made payable in May of 1996 when the stock was trading almost 30 points below Friday's close. In the event of a pullback on Monday, we are comfortable adding positions if UHS stays above our suggested stop at $80.00. A good entry point for momentum investors will present itself if UHS moves above its 50-DMA of $85.81. This trade becomes more enticing if the move above the 50-DMA is accompanied by midday volume of at least 150,000 shares. We are additionally encouraged by the fact that the OBV is getting stronger.

Picked on March 15th @ $83.50
Change since picked +0.87
Stop Loss @ $80.00