4-Star Stocks Poised to Pop: Metropolitan Health

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, health-care provider Metropolitan Health Networks (ASE: MDF) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Metropolitan Health's business and see what CAPS investors are saying about the stock right now.

Metropolitan Health facts

Headquarters (Founded)

West Palm Beach, Fla. (1996)

Market Cap

$201 million

Industry

Managed health care

Trailing-12-MonthRevenue

$374.6 million

Management

Chairman/CEO Michael Earley

CFO Robert Sabo

Return on Equity (Average, Past 3 Years)

37%

Cash/Debt

$49.5 million / $919,000

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96% of the 216 members who have rated Metropolitan Health believe the stock will outperform the S&P 500 going forward. These bulls include JTMcGee and bosstocks.

Just last month, JTMcGee nicely summed up the Metropolitan Health bull case:

Low interest rates mean lower utilization from seniors on both fronts and higher earnings for as far as the eye can see. Good management focused on growth, shareholder value. This is a takeover candidate at current valuation, no doubt about it.

In fact, Metropolitan Health sports a particularly paltry forward P/E of 6.8. That represents a discount to industry peers like Humana (NYS: HUM) (9.8), UnitedHealth (NYS: UNH) (9.9), and WellPoint (NYS: WLP) (8.3).

CAPS member bosstocks applauds Metropolitan Health's recently approved purchase of rival Continucare:

MDF is valued very cheaply at these levels even assuming stagnant growth in the future. ... Therefore I believe the margin of safety is quite large at this point. ...

Just take a gander at the financials for CNU and do the math. This is a no brainer investment with serious upside. Management on the call ... sounded very optimistic over the merger, was very impressed with the quality of CNU's staff, and emphasized ambitious future growth plans. The financing ... will leverage the new company substantially. Considering the cash flows, these obligations should be met with ease, and returns to equity will increase dramatically. ...

All in all things are looking good in the Sun Shine State.

What do you think about Metropolitan Health, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackMetropolitan Health?Add it to your watchlist.

At the time this article was published We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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