2014 has been another amazing year for stocks, and now the bull market is closer to being six years old and stocks have risen some 200% from the inflection bottom in March of 2009. Health care is not a sector that would be considered a market leader in most bull markets, but the S&P 500’s 50 or so health care stocks have led the charge in 2014 and over the past year. However, that trend has abated in the past month, since the market recovery came on strong, due in part to five large laggards holding back the sector gains.

24/7 Wall St. has identified five of the lowest performing health care stocks over the past month which need to catch up to peers. In the hospital sector, we have shares of Tenet Healthcare Corp. (NYSE: THC) and Universal Health Services Inc. (NYSE: UHS), which held back the health care sector’s gains in the past month. Biotech giant Gilead Sciences Inc. (NASDAQ: GILD) has suffered profit taking after earnings, and concerns about competition seem to be weighing on Biogen Idec Inc. (NASDAQ: BIIB). DaVita HealthCare Partners Inc. (NYSE: DVA) has also been a laggard after earnings, despite news of a key insider increasing its stake.

Had these five performed better, health care would have again led the way. After all, the services sector is up about 8.0% in the past month, versus over 6.5% for health care. With health care leading the way in 2014, the gains for the sector have been as follows: 6.5% over the past three months, 12.7% over the past six months, 21% year to date and 25.5% over the trailing 12 months, according to FINVIZ.com.

So, an election that has been deemed very bullish for most market sectors should in theory also allow the run in some health care components to continue. The markets have gotten more global easing and quantitative easing as support, and the inevitable rising rate environment in the United States just seems to keep being minimized and pushed further out. Still, it is surprising that health care stocks have led the charge in 2014. Did healthcare become a much more interest rate and global-easing dependent sector all of a sudden?

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What is interesting is that had these five top health care stocks maintained their momentum then health care would again be the top performing sector. Some of these laggards over the past month have done really well this year, but none of them are still in the top 10 of the 50 S&P health care sector stocks.

Tenet Healthcare
> Share price: $47.50
> 52-week range: $37.95–$63.61
> Past month performance: -18%

Tenet Healthcare Corp. (NYSE: THC) saw its shares drop at the beginning of November as it reported earnings that met expectations on the bottom line. The asset-impairment costs and discontinued operations may have lowered the earnings reaction. That being said, hospitals in general may not get to keep pillaging and plundering, if audit functions are increased or if enrollment of Obamacare keeps getting dialed back.

If you look at the long-term chart over four years, some might be concerned that the stock is on the wrong side of a nearly perfect head and shoulders chart pattern. Tenet was a $20 stock in mid-2012. At $47.50 now, its consensus analyst price target is up at almost $66, and the highest analyst price target is all the way up at $75.

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Biogen Idec
> Share price: $299.10
> 52-week range: $245.31–$358.89
> Past month performance: -6%

Biogen Idec Inc. (NASDAQ: BIIB) was hurt during the market sell-off in mid-October and made a small recovery before falling off again in mid-November. The reaction was tied to earnings and drug sales. One issue that always seems to arise with Biogen Idec is new potential competition for its multiple sclerosis leadership position.

Investors have to keep in mind that Biogen Idec was a $50 stock back in 2010 and a $150 stock at the start of 2015. Now it is near $300. Analysts have a consensus price target of closer to $370, and the highest analyst price target is well above $400.

Universal Health Services
> Share price: $103.06
> 52-week range: $73.06–$115.64
> Past month performance: -3%

Universal Health Services Inc. (NYSE: UHS) made a solid recovery following the market sell-off in mid-October, but this was short-lived as shares plummeted back to levels not seen since July. The company met its quarterly earnings reported in late October, but it seems to be pushed down as part of a larger trend. Just like Tenet, it was a winner because it owns hospitals and they won under Obamacare. That means they have some of the same risks as peers.

Keep in mind that Universal Health was a $50 stock at the start of 2013. With shares close to $103, the stock’s consensus analyst price target is almost $125 and the highest analyst target price is $135.

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Gilead Sciences
> Share price: $100.59
> 52-week range: $63.50–$116.83
> Past month performance: -5%

Gilead Sciences Inc. (NASDAQ: GILD) sold off with the markets from September to early October, and then ran higher with the markets through the end of October — only to fall out of bed again. Some concerns remain over its Sovaldi and hepatitis C treatment costs being astronomical in the United States ($80K and $90K) but being offered internationally at a few thousand dollars under generic deals. Its earnings report on October 28 helped to act as a peak for the stock. Still, even with a gain of 34% so far in 2014, it was not in the top 10 health care stocks in the S&P 500. Another issue was big insider selling at Gilead.

To show what a monster Gilead has been, it was a $25 stock as recently as mid-2012, and now it the largest biotech around with a market cap of $151 billion. The stock price is just over $100, and the consensus analyst target is above $122. Gilead’s highest analyst price target is all the way up at $170.

DaVita Healthcare
> Share price: $75.13
> 52-week range: $56.18–$78.52
> Past month performance: -0.5%

DaVita HealthCare Partners Inc. (NYSE: DVA) was effectively flat for the past month, but it is still up almost 30% so far in 2014. Being the dialysis leader has worked rather well under Obamacare, as dialysis is one of the highest cost items that drive up health care costs. The company was not hit too hard during the September to October period, but the stock screamed higher to $78 by the end of October.

Shares sold off after earnings in early November and have tried to find their footing again with shares around $75. The consensus analyst price target is only up at $76.58, and the highest analyst price target is $86. What is interesting here is that Warren Buffett’s Berkshire Hathaway has again acquired more shares, and more recently than the September 30 cutoff date from the last full holdings filing.

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