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 12, 2001

Technology stock bulls sucked some cash out of just about everything in order to buy their beloved stocks and UHS suffered just enough of profit taking to take this winner down to our $89.00 stop. UHS may prove to be a good buy once this rotation reverses. UHS will announce its quarterly earnings on May 1st and we would not be surprised if the company makes a split announcement following their earnings release.

Picked on March 15th @ $83.50
Profit/Loss +5.50 (7%) (Stopped Wednesday @ $89.00)
Best Profit +9.50 (11%)

April 10, 2001

Shares of this major hospital owner and operator are creeping ever closer to the psychologically important $100.00 level. Although the focus of today's market rally was concentrated upon the technology stocks, UHS has nevertheless been able to keep its momentum going. UHS is scheduled to release its earnings late during the trading day of April 17th. A split announcement, in conjunction with the earnings release, is becoming increasingly likely due to the share price advance. UHS appears poised to test the resistance of $96.03. Although we will be exiting this position before the earnings release, some aggressive traders may want to add to positions if UHS can hold the support offered by the 5-DMA of $91.19. Momentum traders may enjoy a nice quick profit if UHS can move above today's high of $93.00, accompanied by first hour trading volume of over 100,000 shares. The MACD is trending nicely higher and the RSI is indicating that there is plenty of room before the stock would be considered overbought. Both of these indicators point towards continued gains.

Picked on March 15th @ $83.50
Change since picked +8.80
Stop Loss @ $89.00

April 8, 2001

UHS is somewhat inoculated from the current economic malaise because it is an owner and operator of hospitals. Medical care is one of the last things people forego when they are feeling the pinch. This fact has helped UHS to maintain its earnings growth. For the quarter that just ended, UHS is expected to post profits of $1.12, which would be a nice increase of 22% over the same quarter a year ago. UHS is also a solid split candidate. The company's last split was paid out in May of 1996. At that time, the stock was trading at $56.38. Now that the stock is trading above $90.00, management must be tempted to announce a split soon. Stocks, especially those that trade on the NYSE, have a peculiar habit of making a beeline to $100.00 once they cross $90.00. We believe that UHS has a good chance of enjoying this phenomenon. We have raised our stop to $89.00, which is just below the support offered by Thursday's low print, in an attempt to lock in our profits. Investors may want to enter new positions if UHS can stay above $89.00. If UHS gaps up three or more points on Monday's open, one might want to wait for a pullback before going long.

Picked on March 15th @ $83.50
Change since picked +7.02
Stop Loss @ $89.00