Vivus’s Weightloss Drug is a Flop and 2 Hot Healthcare Stocks to Watch

HealthcareServicesShares of UnitedHealth (NYSE:UNH), Intuitive Surgical (NASDAQ:ISRG), and Vivus (NASDAQ:VVUS) are all on the move on Wednesday.

UnitedHealth: Current Price $54.10

UnitedHealth is an industry barometer for important healthcare trends, as it it is the largest managed-care provider by revenue and usually the industry’s first company to report quarterly results.

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For the three-month period ending December, UnitedHealth reported a profit of $1.24 billion, or $1.20 per share, a decrease from the $1.26 billion reported in the year-ago quarter. However, revenue for the fourth quarter rose 11 percent to $28.77, slightly beating expectations. Analysts polled by Thomson Reuters had predicted earnings of $1.19 per share on revenue of $28.24 billion.

The company’s fourth-quarter results were strengthened by the addition of approximately 600,000 new members, increasing the number of customers UnitedHealth serves to 83.7 million from 77.6 million in the prior quarter and 78.1 million a year earlier. The rise in the number of customers using its medical services bodes well for the industry as a whole, because it indicates that “former healthcare usage patterns” are picking up as the economy recovers, said The Wall Street Journal.

That trend was also evident in the company’s consolidated medical-care ratio for the quarter, a measurement that represents the portion of insurance premiums used for patient care. During the economic downturn, medical insurers were able to keep a greater portion of premiums because customers used fewer medical services. However, for the most recent quarter, UnitedHealth’s ratio grew to 80.5 percent from 79.7 percent in the previous year.