Aetna (AET), which provides health insurance and related services, has been one of the best stocks of the year, though it has regularly come in to touch its 40-day average. It bounced there last week, and pulled back Friday and Monday, which should be the perfect entry point. The whole managed healthcare group has traded really well this year, with the Dow Jones Healthcare ETF (IYH) up 28% YTD. Names like Wellpoint (WLP), Cigna (CI) and of course AET have outperformed even that, and it’s been very fruitful to buy them on pullbacks. AET has shown a relatively modest 36% gain YTD as compared to the crazy 42% and 46% gains YTD on WLP and CI respectively, so I anticipate that of the three, AET has the ability to rally even further.
This has been a great sector and stock, and should do well.
Recommendation: Buy AET for a $67.50 target.
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