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 29, 2001

Health care stocks were generally strong today, presumably due to a renewed interest in buying stocks with relatively stable growth and more reasonable valuations. Consequently, UHS made a strong move today in a bid to catch up with the strong rally we saw earlier this week in the overall market. Perhaps some of the rally can be attributed to the fact that UHS is probably overdue for a split. UHS last split its stock in May of 1996. The split was made payable when the stock was at $56.38, well below today's closing price. Turning to the charts, UHS popped back above the 50-DMA of $84.72 today. Traders may be interested in adding to positions if UHS can stay above the 50-DMA. In addition, momentum traders may be interested in buying UHS if the stock can move above $87.34, which would establish a new high for the week.

Picked on March 15th @ $83.50
Change since picked +3.49
Stop Loss @ $80.00

March 27, 2001

The huge rally among the Dow Jones Industrials (INDU) has placed Julia Roberts-sized smiles upon the faces of NYSE traders. Unfortunately, UHS, a major owner and operator of hospitals, has only made a modest gain. UHS was likely held back due to yesterday's announced acquisition of 80% of the fourth largest operator of French private hospitals for $75 million. Some may believe that investing in Europe right now is a dicey proposition. Nevertheless, the technical picture for UHS continues to look promising. The 200-DMA, which closed today at $81.06, is still providing excellent support. The 50-DMA provided resistance today at $84.81. We have to admit to a little disappointment in the fact that UHS soared above the 50-DMA yesterday but failed to maintain its momentum. Again, this was probably due to the announced acquisition. On the plus side, the MACD is now slightly positive. Perhaps a split announcement will get UHS moving forward again. We continue to like the prospect of adding positions if UHS can hold the $81.06 support. A move above today's high of $84.75, that includes volume approaching 400,000 shares by the close, may prove to be another good entry opportunity.

Picked on March 15th @ $83.50
Change since picked -0.41
Stop Loss @ $80.00

March 25, 2001

UHS, a leading owner and operator of 47 hospitals across the country, survived what was clearly a tough week for stocks in general and health care stocks in particular. Last week’s trade in UHS was characterized by the establishment of a tight range. After falling from its peak of $112.93 late last year, UHS is now consolidating above its 200-DMA of $80.81 and below its 50-DMA of $85.16. These prices represent the support and the resistance that should define next week's trading. A move above $85.16 could be the start of a nice breakout, especially if we see volume approaching 400,000 shares by the close. We would be very cautious if UHS fell below $80.81. With that said, the MACD is threatening to issue a buy signal. A nice start to this week for UHS would tip the MACD to the upside and would confirm a breakout. We also like the fact that the RSI has plenty of room before UHS would be considered overbought. New entries could be considered on a break above the 50-dma, now at $84.88, on volume that would put UHS on pace to do 450,000 shares for the day.

Picked on March 15th @ $83.50
Change since picked -0.65
Stop Loss @ $80.00