"RehabCare Group (NYSE: RHB), a leading provider of rehabilitation program management services is our latest buy," says Dennis Slothower, editor of Stealth Stocks newsletter.
"In partnership with healthcare providers, the company provides post-acute program management, medical direction, physical therapy rehabilitation, quality assurance, compliance review, specialty programs and census development services.
"The company operates in more than 1,200 hospitals, skilled nursing facilities, outpatient facilities and other long-term care facilities. It also owns and operates five long-term acute care hospitals
"We consider RehabCare Group to be a health care service company that will continue to make money regardless of the economic environment.
"In 3Q09, RHB’s revenues advanced by 15% and net income climbed by 69%. Not many companies that I know of can increase revenues and earnings at such a torrid pace.
"The company has strong fundamentals and according to my charts is trading in a bullish uptrend. In addition, the stock’s P/E is 12, which tells me that traders are overlooking this gem of a business.
"According to my numbers, RHB should be selling in the low $60s over the next three to five years. It is currently trading around the high $20s; so RHB has large upside potential.
"Place a sell stop at 25% below your entry price. As the stock rises, continue to raise your stop so that you are trailing the Friday close by 25%."
