In his Ticker Tape Digest, technician Leo Fasciocco looks for "breakout" stocks; his latest feature is HMS Holdings (NASDAQ: HMSY), which coordinates benefits for government healthcare programs.

"With annual revenues of $185 million, HMSY helps ensure that healthcare claims are paid correctly and by the responsible party.

"As a result of the company’s services, government healthcare programs recover over $1 billion annually and avoid billions of dollars more in erroneous payments.

"The company's clients include health and human services programs in more than 40 states. It services Medicaid managed care plans, the Centers for Medicare and Medicaid Services (CMS), and Veterans Administration facilities.

"Technically, the stock has broken out from a three-month, cup-and-handle base. The move carried the stock to a new all-time high. That is very bullish and could draw in more buying by the new-high crowd.

"The stock has appreciated 90% the past 9 months. That compares with a 10% rise in the S&P 500 index. The performance of HMSY is outstanding considering the stock has a low beta of 0.13 versus 1.00 for the stock market. That means HMSY's stock tends to be a slow mover.

"HMSY's long-term chart shows the stock climbing from 5 back in 2004 to a peak of 44. It weathered the bear market extremely well. 

"The company reported third quarter earrings increased 31% to 30 cents a share from 23 cents a year ago. The consensus estimate on the Street was 29 cents a share. It topped that. The highest estimate was at 36 cents a share.

"This year, analysts forecast a 33% jump in net to $1.06 a share from 80 cents a year ago. The stock sells with a price-earnings ratio of 40. That is high given the earrings growth rate. However, in strong markets many institutions are willing to pay up for the stock.

"Going out to 2010, the Street expects a 23% gain in net to $1.31 a share from the anticipated $1.05 a share. We see chances for that estimate to be lifted.

"Overall, HMSY is a solid growth stock making new highs. We are targeting the stock for a move to 52 within the next few months.

"One needs to be patient with this stock. A protective stop can be placed near 39 giving it room. We rate HMSY an outstanding intermediate-term play as long as earnings growth remains strong."