Last night, we noted that medical insurance companies were skyrocketing before the market close, aheadof the announcement of a Medicare Advantage reversal by the Centers for Medicare and Medicaid.
In a nutshell, the Medicare Advantage reimbursement rate for fiscal 2014 was increased by 3.3% instead of being cut by the previously anticipated 2.2%.
As expected, the sector rallied in response to the news and continues to enjoy a strong day of trading today.
Two of the winners, Humana (HUM) and UnitedHealth Group (UNH) rose 8% and 7.5% and are the subject of today�s Barron�s Take, where our colleague Teresa Rivas writes (subscription required):
Even with Tuesday’s rally, Humana and United Health don’t look overbought. They trade around 9.5 times and 10.5 times forward, respectively, while both sport yields hovering and 1.3% and double-digit returns on equity.
Per the Take, both Humana and United Health received bullish outlooks from analysts in the form of upgrades, while we additionally note that Cantor reiterated United Health at Buy and upped the price target to $70 from $63.
Humana and United Health are not the only companies seeing robust trading today. Other insurers enjoying the ride include WellPoint (WLP), up 2.3%, Aetna (AET), up 4.8% and Cigna (CI), up3.3%.
No comments:
Post a Comment