For Immediate Release
Chicago, IL- July 06, 2015 – Today, Zacks Investment Ideas feature highlights Features: Centene (CNC - Free Report) , Health Net ,Anthem ((ANTM - Free Report) ) and Molina ( .
Potential Buyouts in the Managed Care Space
The day before a long weekend, Centene (CNC - Free Report) announced that its board had voted for the acquisition of Health Net for $6.3 billion. This is comes at a curious time as a few larger players in the same space are more or less "in play."
Other Deals Likely
The Affordable Care Act was just upheld by the Supreme Court, so it looks like the managed care providers are going to be in a race to get big. Size matters in this space as the companies will be able to spread costs across a greater group of customers. That same larger group of customers could end of generating more fees for the combined companies and that could lead to higher earnings.
Higher earnings estimates is a key component of the Zacks Rank, and Centene has held a high rank for most of the year. As we look at the earnings estimates for the company we can see that analysts have been adding a few pennies each month since October of last year.
Maybe now would be a good time to mention that I added CNC to Home Run Investor back on July 30, 2014. Home Run Investor looks for small cap stocks with aggressive growth potential, and CNC delivered on the promises I saw back then. The stock is up more than 100% in a little under a year.
At the start of this year, I noted to subscribers that CNC should be a "core holding for 2015" and that I would not sell the stock or remove it from this list until I absolutely had to.
But What Now?
Know that there are probably more deals to come, where should one look to in the managed care space? Basically, I am asking what stocks look at good to me now as CNC did back on July 30 of last year.
The other Zacks Rank #1 (Strong Buy) stock in the managed care space is Anthem ( (ANTM - Free Report) ), and they are already "in play" as noted above.
One stocks that is not on the list is Molina . At a forward PE of 27x this nearly $4B provider might be worth a deeper look. Right now it is a Zacks Rank #3 (Hold) so I won't be adding it to Home Run Investor any time soon, but I do have my eye on it!