May 3, 2011

Posted by in Stock Reports | 0 Comments

Healthcare Stocks

Healthcare Stocks

 

Healthcare Stocks HUM, AET, UNH

First and Foremost I must say, the reform debate clouded the prospects of many Healthcare stocks (Humana Inc. HUM, Aetna Inc. AET and Unitedhealth Group, Inc. UNH)  through my green eyes. Thus clearing a path for Wall Street as well as Main Street…traders as well as investors now see “Clear-Cut”  Winners and Losers.

 

Let us now take a look at “The Good, The Bad and The Ugly”…(Not necessarily in that order) shall we…..

BUY === > Humana
(HUM, $66)

This Louisville, KY. – based insurer could get a boost in 2011 from two of the most powerful forces around: the U.S. military and Wal-Mart Stores. Humana got a two-year extension to provide insurance for soldiers and started a prescription drug plan with the megaretailer.

Humana is one of just two insurers that Ana Gupte, senior analyst at Bernstein Research, expects to have double-digit earnings per share growth each year for several years. Humana is trading at eight times 2011’s expected profits, about average for health insurers.


SELL === > Aetna (AET, $37)

Investors might wonder if Hartford, Conn. – based healthcare stock Aetna has come down with something. For most of last year, the firm lost membership in both its commercial and Medicare segments. Meanwhile, the government’s Center for Medicare & Medicaid Services stopped the insurer from enrolling new members into Medicare Advantage and certain prescription drug plans through 2011.

Gupte expects just single-digit growth from the company for the next few years. An Aetna spokesperson says the firm is working to get the Medicare sanctions lifted.


HOLD === > UnitedHealth Group (UNH, $45)

With 75 million customers, healthcare stocks like UnitedHealth Group is the nation’s largest insurer. The firm has several lines of business that might help it minimize any problems that crop up as a result of health care reform, analysts say. That diversification could be put to the test, however. About one quarter of its business is Medicare-related, and the company faces a “challenging reimbursement environment,” says Charles Boorady, health care analyst at Credit Suisse.

The Minnetonka, Minn. – based firm announced that it had won business from the military, but then the military extended its contract with Humana. The result is that UnitedHealth can’t service soldiers until at least 2012, although a United Health spokesperson says the firm’s bid is still being reviewed.

Trading at 10 times 2011’s expected earnings, the stock isn’t cheap compared with other insurers.
Please note, StockRunway.com does not hold any position in any of the above mentioned tickers/companies nor does any affiliates associated with StockRunway.com. The financial insight has been offered by a Professional Analyst by the name of Ana Gupte who is employed by Bernstein Research. Please make sure you do your own due diligence and research before investing or trading.  See more Stock Market News.

 

 

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