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

April 5, 2001

Shares of this major hospital owner surged during Wednesday's market action. Although UHS took a bit of a break today while most traders concentrated on picking up battered technology shares, those that are long UHS have to be pleased with the stock performance during this trying week. The advance in UHS has enabled us to raise our stop to $86.50. Now that UHS has crossed the $90.00 threshold, a split announcement becomes even more likely. Another benefit of crossing over $90.00 is the strong possibility that UHS could stage a quick move to the psychologically important $100.00 level. The next resistance level before $100.00 is $96.05. We see some support provided by the 5-DMA of $88.28. Investors may want to add to positions as long as UHS stays above this support tomorrow. Additionally, momentum traders might want to jump on UHS if it can surpass today's high of $91.60 with midday volume over 190,000 shares.

Picked on March 15th @ $83.50
Change since picked +6.93
Stop Loss @ $86.50

April 3, 2001

This market is making investors try and hold on to something solid and so far shares of this major hospital owner and operator have proven to be somewhat resilient. There are probably a few reasons why UHS is hanging in there. First of all, UHS has already pulled back significantly from its high of $112.93. Secondly, UHS is currently trading at a reasonable P/E of 28.42. This fact is especially important considering UHS should be able to maintain its steady earnings growth despite the economic slowdown. UHS is also a viable split candidate because the stock is trading at levels substantially higher than where it was trading when the last split was announced. We like the fact that UHS was able to close above its 50-DMA of $84.94 today. Momentum traders will probably want to wait for UHS to move above Friday's high of $90.25 before going long. To that add, the MACD and the RSI point towards longer-term price increases. We do advise caution, though, should UHS close below $84.94.

Picked on March 15th @ $83.50
Change since picked +2.05
Stop Loss @ $80.00

April 1, 2001

After stumbling out of the blocks at the start of last week, UHS made up for lost time and closed the week in stellar fashion. UHS, which owns and operates 47 hospitals across the country, may have been a beneficiary of a little end of the quarter window dressing. Health care stocks have become desirable within the investment community due to their reliable revenue stream and stable profits. The nice rally last week has increased the possibility that UHS will announce a split. The last split occurred in May of 1996 when the stock was trading more than $30 below current levels. The technical picture for UHS continues to improve, especially now that the stock has closed comfortably above its 50-DMA of $84.78. A move above Friday's high of $90.25 on at least 250,000 shares traded by midday may prove to be an excellent entry point. However, if the stock gaps up to $92.00 or higher on the open, it may be best to wait for a little pullback before entering a trade. The next resistance level for UHS is likely to be found at $96.00. The MACD is now decidedly positive and may be portending a nice long-term up trend. We also like the fact that the RSI is telling us that UHS has plenty of upside potential before becoming overbought. Stops remain firm at $80.00.

Picked on March 15th @ $83.50
Change since picked +4.80
Stop Loss @ $80.00