2 Stocks to Buy Hand Over Fist in October

Nutex Health reported first-half EPS of $15.87, up 2,785% year over year, and EBITDA of $162.5 million, up 218%; it also said IDR-related changes reduced contract services expenses by $52.3 million. Elevance's first-half revenue rose 2% to $106.5 billion, while EPS fell 15% to $14.73; it expects 2026 adjusted EPS of $27, at least 12% growth, and another 12% increase in 2027. Both stocks trade below the healthcare sector's 29.75 average P/E, and Elevance has raised its dividend for 15 consecutive years and has $5.3 billion remaining in its buyback authorization.

Analysis

The apparent valuation discount is not equally actionable. For NUTX, the key question is earnings quality: the reported IDR-related expense reduction may reflect lower dispute fees and collection timing rather than a durable, repeatable improvement in hospital economics. A trailing P/E based on a recently profitable, small-cap company can therefore be a misleading anchor. If cash collections, receivables aging, and margins do not confirm the EPS surge, the low multiple may be warranted. The second-order risk is that payer disputes or changes in IDR administration delay cash conversion even if reported earnings remain strong.

ELV offers a cleaner but still conditional recovery thesis. Pricing resets can restore margins only if they keep pace with medical-cost utilization; renewed cost pressure, especially in government programs, could erode the expected earnings rebound before premiums can be repriced. Buybacks support per-share results but cannot substitute for underwriting improvement. The article’s sector-average P/E comparison is not a sound basis for either stock: business mix, earnings normalization, and risk differ materially.

Over the next 1–3 months, ELV’s quarterly medical-cost trend and guidance are the primary catalysts. Over 6–18 months, the thesis depends on sustained pricing discipline and Carelon execution. For NUTX, the structural test is whether IDR cash realization and hospital-level profitability persist across reporting periods. The contrarian point: the market may be discounting genuine ELV normalization, but NUTX’s headline growth may be more fragile than its valuation suggests.

Key Decisions for Investors

• Prefer a measured ELV long over a broad healthcare-insurer exposure, initiated in tranches rather than chasing strength. Reassess after the next results: sustained medical-cost control and maintained earnings guidance support the thesis; worsening cost trends or a guidance cut falsify it.
• Consider a relative-value position—long ELV against a diversified managed-care peer basket—only after checking current valuation, earnings revisions, and constituent exposure. The trade is a margin-normalization view, not a bet on the article’s sector P/E comparison.
• Keep NUTX on a watchlist rather than underwriting the reported EPS growth at face value. Before entry, verify operating cash flow versus net income, receivables aging and collections, hospital-level margins, and the recurring versus one-off components of the IDR-related expense decline.
• For NUTX, treat delayed collections, rising receivables, weaker hospital utilization, or reversal of the expense benefit as thesis breaks; small-cap volatility and liquidity can amplify downside before fundamentals are clarified.