Right now this market is jumping up and down and screaming at anything involving outpatient healthcare. One miss by a big company and boom goes the dynamite. While you may be hurting today if you were a shareholder heading into the news, it’s a great opportunity for anybody in cash, on the sidelines looking in.

I’ve put together a quick list of the highest rated stocks in this industry. These are Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) stocks that are in an industry we have in the Top 7% of our Zacks Industry Rank. The downside pressure may be presenting us with a fantastic buying opportunity. Are we really going to let one company give a black eye to an entire industry?

While I’m not going to speculate on the impact around the rest of the industry, I am going to look for stocks that are probably a bit overdone on this selling today. Especially when the rest of the market is performing so well. Can you imagine how much the Nasdsaq (QQQ) would be up if these stocks were a participant in the rally?

AmSurg (AMSG - Analyst Report)

AmSurg Corp., through its subsidiaries, provides ambulatory and physician services in the United States. The company operates through two divisions, Ambulatory Services and Physician Services. The Ambulatory Services division acquires, develops, and operates ambulatory surgery centers (ASCs) in partnership with physicians. The Physician Services division provides outsourced physician services to hospitals, ASCs, and other healthcare facilities primarily in the areas of anesthesiology services; children’s services, such as neonatal management services specializing in acute inpatient care and treatment of infants; emergency medicine services; and radiology services, including diagnostic, and interventional and tele radiology services to hospitals, imaging centers, and physician group practices, as well as other services.

AMSG probably has experienced the worst drop of all these stocks. The dip started near $85 a couple of weeks ago. Shares came down to support at $75 but a couple of rough days for the industry have sparked a selloff even further. Now trading intraday all the way down to the $60 level, this could be a great buying opportunity.

AAC Holdings (AAC - Snapshot Report)

AAC Holdings, Inc. provides inpatient substance abuse treatment services for individuals with drug and alcohol addiction in the United States. Its therapy services include motivational interviewing, cognitive behavioral therapy, rational emotive behavior therapy, dialectical behavioral therapy, solution-focused therapy, seeking safety, eye movement desensitization and reprocessing, and systematic family intervention services. 

AAC may have come down nearly 6% last week but the intermediate term bullish trend remains intact. After bottoming out near $15 in early August shares have retraced a good chunk of the move down from the June highs over $46. The 21-day moving average appears to be providing support here.

Amedisys (AMED - Analyst Report)

Amedisys, Inc., together with its subsidiaries, provides home health and hospice care services. It operates through two segments, Home Health and Hospice. The Home Health segment offers a range of services in the homes of individuals who may be recovering from illness, injury, or surgery. This segment provides skilled nurses, nurse practitioners, home health aides, physical and occupational therapists, speech therapists, and medical social workers; and chronic care clinical programs for patients with chronic diseases, such as cardiovascular, respiratory, diabetes, behavioral health, rehabilitative, and medical surgical conditions. The Hospice segment offers care that is designed to provide comfort and support for those who are facing a terminal illness, including heart disease, pulmonary disease, Alzheimer’s, HIV/AIDS, and cancer. 

Frustrating day for AMED as the stock has eliminated a month’s worth of gains in just one session. That’s the bad news, the good news is that shares are bouncing at $35 here which was a support level in late September and close to an area that provided a boost in late August.

Radnet (RDNT - Snapshot Report)

RadNet, Inc. provides outpatient diagnostic imaging services in the United States. It offers various imaging services, including magnetic resonance imaging, computed tomography, positron emission tomography, nuclear medicine, mammography, ultrasound, diagnostic radiology (X-ray), fluoroscopy, and other related procedures. The company also develops and sells computerized systems for the imaging industry, such as picture archiving communications systems; and provides teleradiology services for remote interpretation of images on behalf of radiology groups, hospitals, and imaging center customers. 

RDNT shares were off last week as well but they haven’t breached Monday’s open yet. That big move followed by a brief consolidation looked to be the start of a leg higher. Unfortunately shares ran out of gas near the mid-September highs and the outside market pressures have since sunk the ship. Shares are above the 21-day moving average, implying a bullish trend in the intermediate term.

Chemed Corp (CHE - Analyst Report)

Chemed Corporation provides hospice and palliative care services in the United States. It operates in two segments, VITAS and Roto-Rooter. The company offers its services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers. It also provides plumbing and drain cleaning services to residential and commercial customers.

A sharp drop for Chemed below previous support may reverse here intraday. Up until recently it looked as if short term support was solid and shares would buck the trend and retrace to the $140s. You’ve got to believe that today is the worst of it and shares will recover.

Bottom Line

Sometimes the market overreacts. That usually gives you a golden opportunity to come in and scoop up some very quality names at low prices. Last week's selloff may just be the opportunity you’ve been waiting for.