Humana Inc. (NYSE:HUM)
Health Insurance giant Humana is exploring the possibility of a sale of the entire company and has hired Goldman Sachs to facilitate the process. This sale could spark a wave of consolidation in the health insurance industry as wide spread reform is taking place. Potential suitors include Aetna and Cigna Corp. Shares of HUM traded higher near $220 on high relative volume before closing at $214.65, up $36.24 or roughly 20%.
HUM 5 Minute Intraday Chart
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Analyst’s on Humana Inc.
Morningstar analyst, Vishnu Lekraj believed this deal had been a long time coming and had the following comments; “A deal has most likely been in the works for a while.”A lot of analysts, including myself, expected something to happen with Humana given the opportunity for some larger insurer to add to their medical membership and diversify what they have.”
TheStreet.com analysts rate HUM a “BUY”
“We rate HUMANA INC (HUM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company’s strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, increase in net income and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow.”
Company Profile
Humana Inc., together with its subsidiaries, operates as a health and well-being company. The company operates through three segments: Retail, Employer Group, and Healthcare Services. The Retail segment provides Medicare and commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and financial protection products directly to individuals. This segment has contract with Centers for Medicare and Medicaid Services to administer the Limited Income Newly Eligible Transition prescription drug plan program and state-based Medicaid businesses. The Employer Group segment offers Medicare and commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and voluntary benefit products, as well as administrative services only products, and health and wellness solutions directly to employer groups. The Healthcare Services segment provides pharmacy, provider services, home based services, integrated behavioral health services, and predictive modeling and informatics services to its health plan members, as well as to third parties. – Yahoo! Finance
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What are you thoughts?
Do you think Humana will be bought out by one of its fellow Insurance rivals? At what price? Please comment below!
