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The Zacks Analyst Blog Highlights: Anthem, Humana, Centene, Molina Healthcare and Joint
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For Immediate Release
Chicago, IL – Jan 04, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Anthem , Humana (HUM - Free Report) , Centene Corp. (CNC - Free Report) , Molina Healthcare, Inc. (MOH - Free Report) and Joint Corporation (JYNT - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
3 Outperformers from Health Insurance in 2017
The year 2017 witnessed a lot of regulatory noise surrounding the Affordable Care Act (ACA). Also, health insurers scaled back their participation due to continued loss on public exchanges. Rising consolidation was another major issue.
The ACA had brought more Americans under health insurance plans. It largely benefitted the industry through a reduction in uninsured population, consequently adding to medical enrollment.
However, everyone was focused on President Trump’s decision to abolish the act. Although the ACA is still not repealed, Trump signed the "Tax Cuts and Jobs Act" into law on Dec 22, which would make significant changes to the law.
The tax act ends the “individual mandate” — a major component of ACA — that requires individuals to have health insurance or face a penalty fee. In the absence of the individual mandate, healthy people are likely to opt out of medical insurance. The Congressional Budget Office estimates that this would increase the count of uninsured Americans by 13 million and push premiums up by an average of around 10% from 2018 to 2027.
Despite facing stringent regulations, health insurers have shown impressive operating performance in 2017, with most of the top players clocking solid top line, bottom line and membership growth. Companies like Anthem, Humana and Centene Corp. have kept raising their full-year guidance at the end of each quarter, indicating their rising operational excellence.
Increasing consolidation in the health insurance industry has led to a reduction in the number of players. Although the effect of market concentration might not have been good for consumers due to higher medical cost, it has helped the players enhance the scale of their operations and gain market share.
In 2017, although two big merger deals — Anthem with Cigna and Humana with Aetna — have been blocked by the U.S. Department of Justice, mergers and acquisitions activities continued to be rife.
The recent merger deal between two of the industry stalwarts — Aetna and CVS Health — is worth a mention here. The deal, if finalized, would join two branches of the industry, in this case health insurance and pharmacy benefit management.
However, public exchanges, formed to serve the underprivileged and patients, have not been much profitable for the insurers. They failed to attract sufficient enrollments from healthy and young individuals, which was required to balance the risk-return trade off. Health insurers like Humana, Aetna, UnitedHealth and Anthem have already started scaling back their participation from these exchanges after incurring mounting losses.
Increasing operating costs related to regulations, investments in information technology, levy of fees and taxes also weigh on health insurers’ margins. The insurers, however, are trying to manage this cost issue with the help of Accountable Care Organizations (ACOs).
Despite the challenges, the industry has gained nearly 40.6% for 2017, outperforming the S&P 500 average of 20%. The HMO industry is among the top 4% of the Zacks Ranked industries.
Stocks in Focus
We zeroed in on three stocks that have outperformed in 2017 and have also seen upward estimate revision in the last 60 days.
Molina Healthcare, Inc., a leading health maintenance organization, has rallied 41.3% in 2017. The company has also seen its Zacks Consensus Estimate for 2018 earnings being revised upward by 5.2% in the past 60 days. It has a Growth Score of A. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Centene, a multi-national healthcare company of the United States, has gained 78.5% in 2017. The company has also seen its Zacks Consensus Estimate for 2018 earnings being revised upward by 4% in the past 60 days. It has a Growth Score of B. The stock also sports a Zacks Rank #1.
The Joint Corporation, another leading managed care company, has gained 87.2% in 2017. The company has also seen its Zacks Consensus Estimate for 2018 earnings being revised upward to 6 cents from break-even expected 60 days back. Joint It has a Growth Score of A. The stock carries a Zacks Rank #2 (Buy).
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Anthem, Humana, Centene, Molina Healthcare and Joint
For Immediate Release
Chicago, IL – Jan 04, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Anthem , Humana (HUM - Free Report) , Centene Corp. (CNC - Free Report) , Molina Healthcare, Inc. (MOH - Free Report) and Joint Corporation (JYNT - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday’s Analyst Blog:
3 Outperformers from Health Insurance in 2017
The year 2017 witnessed a lot of regulatory noise surrounding the Affordable Care Act (ACA). Also, health insurers scaled back their participation due to continued loss on public exchanges. Rising consolidation was another major issue.
The ACA had brought more Americans under health insurance plans. It largely benefitted the industry through a reduction in uninsured population, consequently adding to medical enrollment.
However, everyone was focused on President Trump’s decision to abolish the act. Although the ACA is still not repealed, Trump signed the "Tax Cuts and Jobs Act" into law on Dec 22, which would make significant changes to the law.
The tax act ends the “individual mandate” — a major component of ACA — that requires individuals to have health insurance or face a penalty fee. In the absence of the individual mandate, healthy people are likely to opt out of medical insurance. The Congressional Budget Office estimates that this would increase the count of uninsured Americans by 13 million and push premiums up by an average of around 10% from 2018 to 2027.
Despite facing stringent regulations, health insurers have shown impressive operating performance in 2017, with most of the top players clocking solid top line, bottom line and membership growth. Companies like Anthem, Humana and Centene Corp. have kept raising their full-year guidance at the end of each quarter, indicating their rising operational excellence.
Increasing consolidation in the health insurance industry has led to a reduction in the number of players. Although the effect of market concentration might not have been good for consumers due to higher medical cost, it has helped the players enhance the scale of their operations and gain market share.
In 2017, although two big merger deals — Anthem with Cigna and Humana with Aetna — have been blocked by the U.S. Department of Justice, mergers and acquisitions activities continued to be rife.
The recent merger deal between two of the industry stalwarts — Aetna and CVS Health — is worth a mention here. The deal, if finalized, would join two branches of the industry, in this case health insurance and pharmacy benefit management.
However, public exchanges, formed to serve the underprivileged and patients, have not been much profitable for the insurers. They failed to attract sufficient enrollments from healthy and young individuals, which was required to balance the risk-return trade off. Health insurers like Humana, Aetna, UnitedHealth and Anthem have already started scaling back their participation from these exchanges after incurring mounting losses.
Increasing operating costs related to regulations, investments in information technology, levy of fees and taxes also weigh on health insurers’ margins. The insurers, however, are trying to manage this cost issue with the help of Accountable Care Organizations (ACOs).
Despite the challenges, the industry has gained nearly 40.6% for 2017, outperforming the S&P 500 average of 20%. The HMO industry is among the top 4% of the Zacks Ranked industries.
Stocks in Focus
We zeroed in on three stocks that have outperformed in 2017 and have also seen upward estimate revision in the last 60 days.
Molina Healthcare, Inc., a leading health maintenance organization, has rallied 41.3% in 2017. The company has also seen its Zacks Consensus Estimate for 2018 earnings being revised upward by 5.2% in the past 60 days. It has a Growth Score of A. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Centene, a multi-national healthcare company of the United States, has gained 78.5% in 2017. The company has also seen its Zacks Consensus Estimate for 2018 earnings being revised upward by 4% in the past 60 days. It has a Growth Score of B. The stock also sports a Zacks Rank #1.
The Joint Corporation, another leading managed care company, has gained 87.2% in 2017. The company has also seen its Zacks Consensus Estimate for 2018 earnings being revised upward to 6 cents from break-even expected 60 days back. Joint It has a Growth Score of A. The stock carries a Zacks Rank #2 (Buy).
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.