We can’t turn our back on the fact that irrespective of how the US economy does and whether unemployment rate and housing market situation worsens further or improves dramatically, people are going to need their medicine and they surely cannot avoid seeking health care services. At the same time, the health care sector is known for its resilience in times of economic downturns. So, one should be upbeat on health services sector, and I would pick Managed Health Care Industry as my best bet for investing in 2012. Within this sector and the particular industry I like United Health Group, and expect this stock to continue its outperformance irrespective of stock market performance.

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SECTOR: – Health Services

INDUSTRY: – Managed Health Care

MARKET CAP: – $54.0 billion

This group was founded way back in 1977, and since then it has steadily grown in size and now with its subscriber base notching a staggering 80 million, it is an organization of highest repute in managed health care industry.

Why should you invest in United Health Group in 2012?

There is absolutely no doubt about strong fundamentals of this company, but that’s not the only reason why I believe that this stock will outperform in 2012.

My investment hypothesis on this company is on ground of their abundant free cash flow and their size comparative to competitors.  Health care insurance will continue to grow and being a large player with tremendous free cash United Health Group is in a better position to tap market share than any other company in the sector.

In 2011 alone this stock outperformed the markets by a huge margin as it posted almost 40 percent gains, at the same time they pay attractive dividends too. The company aims at delivering an average long term revenue growth of anywhere above six percent and EPS growth should remain close to 15 percent over the long haul.

Health Care Industry and the corresponding services including efficient management and consulting continue to gain its prominence with growing needs and conceptions. Especially in the United Nations where there is enough focus from the federal statutory authorities in the best interest of its citizens, Health Care is no more a personal affair rather institutionalized with the help of robust corporate involvement. This aims in creating a personal security and determining Health Care comforts to every participant.

United Health Group, Inc. has been successfully growing, now being identified as the pioneer and a leader in conceptualizing Health Care, making it as definite as ever when it comes to the key aspects and services in the Industry.

Being recognized among the reputed among the best, United Health has been scaling up to newer horizons in offering comprehensive solutions including   Optum Health, Health Benefits, Ingenix and Prescription Solutions.

Business Verticals of United Health Group (UNH)

United Health Group, Inc. a multi-dimensional organization with core focus on health care management services. With its wide range of expertise including secured management plans for self-insured employers, risk-based health insurance, health care coverage and IT Management and data consultancy services, United Health Group is one of the very well established entities in the United States offering exceptional benefits to its citizens. Every segment is efficient in isolation in terms of business potential and the proactive range of services.

The Health Benefits segment is one of the most significant facets in the company’s operations serving wide range of beneficiaries. Some of the key benefits are passed on to the privileged patrons; Employer & Individual, Medicare & Retirement and Community & State segments. With its diversified arms focusing in delivering various key benefits, Health Benefits segment has emerged to pose the group as the most preferred healthcare services management company. The scope of services and participation is wide and diversified with all the national employees are covered along including midsize businesses.  Medicare and Retirement benefits are still impressive and compelling as millions of senior citizens are at benefit. The community and state wing of the Health Benefits offer proactive solutions to the states communities providing various schemes to the underprivileged and communities overcoming challenges.

The Optum Health Segment is unique in its package providing financial and ancillary benefits and services and the Ingenix is the technology front of the company providing cutting edge technology solutions in the most crucial aspects like data basing and credentialing. The Prescription solutions assist chain of pharmacies by integrating information and technology, providing functional tools with inbuilt management functionality.

With almost every segment being covered, United Health is at the pinnacle of Health Care Management Services with its amazing engagement modules and technology applications; making it the citizens choice when it comes to Health Care.

United Health Group (UNH): 2012 Trading Strategy and Stock price forecast

In my view the stock remains a good buy around $50 mark, but one should not expect any blowout returns in 2012. My strategy on this stock would be to allocate 30% capital at current market price and then average out on every dip below $50 mark. Given the continued interest for defensives such as healthcare stocks I don’t think United Healthcare Group stock can see any major corrections in 2012. It a buy on dip play, but I think the real returns will be seen by people who can stay invested in this stock for a much longer duration than till the end of 2012.

More Portfolio Stock Picks for 2012 and Beyond

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As promised earlier, I have prepared a list of four more energy stocks you can consider in current market scenario for 2012 and beyond. As of now we cannot call for a certain bottom in place for these counters, but their long term fundamentals remain intact. These stocks, and the ones I mentioned in my last post have been recommended by many analysts and you can easily find bullish forecasts for these stocks on various brokerage reports and financial websites. Let’s take a look at what kind of financials do these energy names hold and what to expect from them?

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Kinder Morgan Energy Partners (KMP)

This company has a strong presence in North America with over 37,000 miles of gas pipelines. At present they have 180 terminals and are among largest energy storage companies. Their recent $21 billion accusation of El Paso is expected to turn positive for the company as given the trend in the industry there is a good scope for distribution growth in years ahead.

Financials

Growth & Valuation

Core Laboratories (CLB)

Now, this is the one that may excite some of you tech hunters to invest in energy space. Their business is simply creating technology for the oil and gas space, and they really have an edge to benefit from the oil boom in US. Well, their operation are not just restricted to US, their products are generating good demand in Africa and Argentina.

Financials

Growth & Valuation

Apache (APA)

Another Houston based company; Apache is a solid independent energy company which deals in both exploration and production of natural gas, nat gas liquids and crude oil. This company has a good growth potential moving ahead and the stock prices should see some smart appreciation.

Financials

Growth & Valuation

Emerson Electric (EMR)

This company has an interesting mix of operations ranging from process management, storage business, and industrial automation to network power and climate technologies. This could be a good bet to play the economic recovery as the company has a good exposure to emerging markets. The company has over 240 manufacturing hubs worldwide and has a large employee base topping 127,700 people. Cherry on the cake, the company has a long standing history of raising dividend, and it currently remains a tad higher to 3 percent.

Financials

Growth & Valuation

Conclusion

Energy remains a good theme for long term investors amid current global uncertainties as the companies are backed by strong fundamentals and their stock prices will eventually head higher when a global recovery takes place.

Now, as we are headed towards a new year its necessary that one takes a fresh look at his portfolio and weed out weaker stocks. Over the next few days, I will come up with a list of handpicked stocks from different industries, which are likely to perform better than the broader markets. So, bookmark this blog and do visit again.

Also, take a look at previously discussed energy stocks.

High Dividend Yielding Energy Sector Stocks for 2012: Top Picks with Price Targets

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Puzzled from ongoing volatility in the market and uncertainty looming on global economic front, investors need to focus on bottom fishing in long term themes. So, let’s take a look at individual plays in the energy sector, which is thriving on the back of escalated drilling activity in oil rich regions of United States. The valuations are attractive in this sector, so the downside risks may not be too much.

Although, it hard to convince nervy investors to take exposure in stocks, but making investments in some of these good quality energy sector stocks can reward you for waiting patiently through hefty dividends. No one can be sure where the prices will bottom out, so the only place where you should take daring bets should be high dividend yielding companies in sectors which look good for a bounce in an economic turnaround. Its safe to assume that energy stocks will benefit the most as the economy recovers, meanwhile enjoy some great dividend yields as a reward for riding through rough times.

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Chesapeake Energy (CHK)

This company enjoys being on the second spot among the largest producers of natural gas in US. We can call them crazy drillers as they are among the most aggressive drillers when it comes to new wells. The most exciting part of this business is that they are inclined towards improving their rank among oil and natural gas liquid producers. Making a switch to producing more liquids will be beneficial for this company as it will improve their margins as liquids enjoy better pricing than natural gas.

Financials

ConocoPhillips (COP)

This company has a well diversified business and enjoys the third rank among integrated energy players, with current operations in more than 30 countries. Its activities are widespread, ranging from exploration and production of petroleum and natural gas to related activities such as refining, transportation and supply, and production of plastics and chemicals.

Key takeaways for investors include a massive restructuring, and a stock split along with a reasonable dividend yield close to 4%.

Financials

Growth & Valuation

Ensco (ESV)

This London based company is a bit different play as it deals in offshore drilling services. The company has a good dividend yield of around 3 percent and carries out drilling activities in both oil and gas industry.

Financials

Growth & Valuation

EOG Resources (EOG)

If you are bullish on US oil discoveries, then EOG Resources is the best bet out there. This company is among the top oil producers in US, and on top of that it has substantial reserves in UK, China, Canada and Trinidad. This gets interesting as they are focused on high priced natural gas liquids and oil.

Financials

Growth & Valuation

Energy Transfer Partners (ETP)

Again, this one is a well diversified business with a wide portfolio of assets in the energy space. One of their key assets is 17,500 miles pipelines in Texas for natural gas supplies. Investors should consider this company for their widespread operation in different areas including Arizona, Louisiana, Arkansas, New Mexico and West Virginia to name a few.

Their propane assets are expected to fetch them a goodish $2.9 billion. Exiting from propane business could have a positive impact on their business as it has been underwater for quite some time.

On top of every other else this company pays a hefty dividend topping 8 percent, so that makes it a good buy amid current market scenario.

Financials

The Pirate of the Silicon Valley Steve Jobs has been famous for knowing what people wanted even before they actually knew they wanted it! The world has witnessed the revolution in information technology in last two decades and Steve Jobs is well recognized for being one of the most active causative of the new makeover of human lifestyle. They have penetrated into our lives and it is already hard to recall how life was without the Apple gadgets.   And now it’s time for a change!

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Steve Jobs due to health concerns wouldn’t be able to keep the Apple sweet like before; but well, we have Tim Cook here, the earlier Chief Operating Officer at Apple who has already acted CEO twice during Steve’s medical absence.  Steve has put in all his life to make the Apple grow good and now is quite buoyant while entrusting the entire Apple Inc to the hands of a football fanatic who joined Apple back in 1998 when Apple Inc was hardly fluttering.   It’s time for the investors to look back and recall how the journey with Apple Inc has been, it’s time for Apple too to sit and smile back at the times Jobs brought to it, and its critically time for Cook to prove his worth and attest  his caliber isn’t any less than his predecessor.

Cook has been at Compaq before he almost gave a revision to his life as well as the technology space by joining Apple- the world’s technology pioneer. Tim Cook has surely been the best fit for Steve’s stand-in and so are the investors and consumers anticipating for yet another technology boom with the new genius at work. It will probably be a tough job to keep the Apple enthusiasts in charismatic Steve’s absence pleased but Cook is already known for his brains, ingenuity and vision so there isn’t really anything to worry about. Tim Cook had been playing Steve’s role in the first half of 2009 when the stock price actually rose 64%; and after Steve’s most recent leave again the stock managed to grow by eight more percents. Steve’s announcement of stepping down as the CEO of Apple Inc (effective immediately) was expected to give a harsh blow to the stock price but the stock only dished in by a percent which was almost equivalent to the day’s market fall. Probably Steve’s long sickness that has been more of a public concern than his personal issue is now well accepted by the masses and the world is prepared for the change the way the mastermind prepared the company to take on the change.

Apple iMac, iPhone, iPod and iPad are well designed products and have further plans for improvements ready. Apple product pipeline is secure for a couple of more years to come. Now the awaited show would be to see how innovation and ideas persist at Apple and whether their image of knowing what the people want before they actually knew it is kept on.

Over the past five years US retail companies witnessed neck cracking competition as the economy continued to slow down. Many businesses were completely wiped out and some scaled down drastically due to reluctance among consumers to spend.

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I am listing down the most resilient retail businesses which continued to post profits throughout this troubled economic patch.

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Amazon ($AMZN)

As per Barrons, Amazon topped the list of best performing retail companies mainly on the back of a user-friendly website and solid customer support service. Amazon posted a revenue figure of $34.2 billion last year, and you would be amazed with its growth rate in past four years which is topping 220%. Product launches such as e-book reader Kindle helped Amazon expand its market presence and that too at a consistent pace, unlike many other internet retailers who fizzle-out after making huge strides.

Rue21 ($RUE)

A lucky survivor from bankruptcy back in 2003 this Warrendale.Pa based organisation is into selling hoodies and denim, and has successfully expanded with 200 new stores in past two years. This company has given stiff price competition to business rival Gap. The total number of retail stores for Rue21 is increasing at a fast pace, and now these are spread across 44 states and the count has crossed 600. They may appear small on the revenue front with $634 last year alone, but their four year growth rate is staggering 180%.

Chipotle Mexican Grill ($CMG)

This Denver based company topped $1.8 billion in revenue last year, and clocked a four year growth rate of 123%. The concept of this business is a bit more attractive than any other fast food business as they target cost-conscious people, and cater to their fresh food needs in a restaurant type surround.

Buffalo Wild Wings ($BWLD)

Catering to die-hard sport fans, who always love to cheer with beer and wings, Buffalo Wild Wings is currently enjoying a fad like spurt. This is the key reason why some analysts worry about the long term future of this business model.

This Minneapolis based company has shown 121% growth over the past four years, and posted revenue nearing $613 million. Competition in this space is rising, so it will be interesting to watch if this company is able to maintain its growth track.

Netflix ($NFLX)

Who did not gaze at this companies stock flying around during this stock market recovery? Based on my stock trading experience, I can only say one thing about this stock- It will at some point correct so hard that some investors will be shattered. But that does not mean this is a bad company. It’s just that it’s really hard to sustain such high valuations. Its will be a good buy again after a steep fall, maybe a 40%-60% lower than current levels.

However, Netflix posted a good revenue figure of $2.2 billion last year. Even the four year growth rate seems attractive at 117%. This company has dominance over DVD rental industry.

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Stance: Cautious bull on Infosys

Infosys is not a new name in the stock market. It is the second largest exporter of IT services in India. This company has a big name in the global market as-well. Infosys, along with the Indian IT industry has seen a quick turnaround in growth over the last six-nine months. The value of rupee is slipping down and companies like Infosys are getting profit.It is positive for the whole IT space indeed and at this point of time market is also not moving anywhere. Infosys has proven to be a stable friend even though in tough times and has the tendency to recover at a faster pace than the stock markets.

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The company has seen a major jump in consolidated income up to rupees 21693 crores which is 29.96% over the previous year.Net profit has grown to rupees 6828 crores from rupees 4941 crores a jump of 38%. The company continues to grow with operational profit of operating 34.08%.

The Emergence of Chinese Economy and Indian Combat

Cost of Capital Providing Good Signals

Infy’s decision to look at a minimum return of twice the cost of capital on average capital employed and thrice the cost of capital on average invested capital has given new way to challenges. The current cost of capital for Infosys is 12.18%. It has come down from 13.32% last year as it has factored in 7% as return on risk free capital as opposed to 8% last year for computing cost of capital.

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Infosys is maintaining a dividend pay-out ratio of 30% of net profits and it has been listed down as a strategy last year. Shares of the company rose post the revenue guidance provided by IT bell whether.

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Cash on the Balance Sheet: A Solid Backbone

Company’s cash and cash equivalents have increased to nearly rupees 10,000 crores which are invested in fixed deposits. Infosys has always maintained that they would not be keen in looking at aggressive acquisitions to grow. It would invariably be niche acquisitions to fill skillset or geographical gaps

The company is focusing on emerging markets like India, China, Mexico, Brazil, Middle East, Australia and Japan. Company CEO,Kris Gopalakrishnan said that 63 per cent of Infosys’ business is centred in North America, 23 per cent in Europe and 14 per cent in the rest of the world. Its share price is more than 3000 in current quarter.

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Current Investment Plans at Infosys

Infosys is to invest in many big areas this year. It is planning to invest around 120 crore rupees in Mahindra World City, Chennai. The company had said exports from this centre rose by 43 per cent. It is also looking at investing around $100 million in its Chinese operations over a period of time and would strengthen the employee count there to 4,000.

Infosys is also setting up a development centre in Kolkata

The company will invest rupees 75 crores to set up the base.

Infosys is growing at very fast pace in Indian stock market. So investment for the short term goal can give big benefits here.

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