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Health Care: Managed Care

In the words of one ­money man­ager, John Rex of J.P. Morgan is “the one analyst ­you’ve simply got to hear.

John Rex

John Rex J.P. Morgan

second teamCharles Boorady Citi

third teamJoshua Raskin Barclays

In the words of one ­money man­ager, John Rex of J.P. Morgan is “the one analyst ­you’ve simply got to hear from.” Investors heard from Rex, who is No. 1 for a sixth straight year, in October 2008 when he down­graded Coventry Health Care to sell, at $28.49, on deteriorating earnings at the Bethesda, ­Maryland–based provider. In mid-­July, after the stock had fallen 34.3 percent, to $18.73, and underperformed the sector by 31 percentage points, the 47-year-old analyst closed the call. Coventry’s shares had climbed to $21.83 by late August.

Charles Boorady rises to second place after four years at No. 3. ­“He’s constantly looking for ways these companies — and investors — can unlock intrinsic value,” observes one fund man­ager. Since July 2007 the ­Citi analyst has been stressing what one buy-­sider calls a “brilliant and unique” observation: Insurance companies can reap big rewards by selling their pharmacy benefits management businesses. His view was vindicated in April when Express Scripts announced plans to acquire NextRx, the PBM subsidiary of Indianapolis-­based WellPoint, for $4.7 billion. The deal is expected to close ­later this year.

WellPoint was also on the mind of Joshua Raskin, who drops one notch to third. The Barclays Capital analyst upgraded the stock to top pick in January, at $37.85, telling clients that fears of health care nationalization were overstated. WellPoint shares did very well indeed, gaining 39.6 percent, to $52.85, through August. Raskin is “cautious when he needs to be but not afraid of a conviction buy when the op­portunity is there,” says one ­supporter.

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