The Zacks Analyst Blog Highlights: Humana, Computer Sciences Corp., Gartner, BMC and SanDisk

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Jul 31, 2013, 09:30 ET

CHICAGO, July 31, 2013 /PRNewswire/ -- 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 Humana Inc. (NYSE:HUM-Free Report), Computer Sciences Corporation (NYSE:CSC-Free Report), Gartner Inc. (NYSE:IT-Free Report), BMC Inc. (Nasdaq:BMC-Free Report) and SanDisk Corp (Nasdaq:SNDK-Free Report).

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Here are highlights from Tuesday's Analyst Blog:

Humana to Acquire American Eldercare

To enhance its Health and well-being services, Humana Inc. (NYSE:HUM-Free Report) has recently entered into a definitive agreement to buy American Eldercare Inc., one of the leading nursing home diversion services providers in Florida. The deal is pending regulatory approval and is expected to close in the fourth quarter of 2013.

American Eldercare provides Medicaid long-term care services in Florida. It was established in 1993 as a Home Nursing provider. Gradually it has evolved into being one of the leading providers of nursing home diversion services to senior citizens and disabled individuals.

Humana has been serving the elderly and disabled population with healthcare services. It has participated in the Medicare program for more than 25 years. Medicare is a federal program that provides certain hospital and medical insurance benefits to persons above the age of 65 and disabled persons under the age of 65. The acquisition of American Eldercare is expected to augment the capacities of the company in this regard.

The company derives 15% of its total premiums from the Medicare Advantage contracts in Florida with the Centers for Medicare and Medicaid Services or CMS. Until last year, Humana provided healthcare services to approximately 384,200 members in Florida and generated revenues worth $5.9 billion. Through its aforementioned endeavor, Humana is expected to occupy a greater share in the market and witness an improvement in revenues with the help of American Eldercare.

Humana has beaten earnings estimates in all the last four quarters with an average beat of 21.2%. Humana is scheduled to release its second quarter 2013 results on Jul 31. The Zacks Consensus Estimate for the second quarter is currently pegged at $2.46, representing a year-over-year improvement of 5.3%.

CSC Secures More Federal Deals

Computer Sciences Corporation (NYSE:CSC-Free Report) has secured a number of deals to strengthen the defense infrastructure of the country. The company has been awarded a deal by the U.S. Department of Homeland Security's (DHS) Customs and Border Protection (CBP) department to support its enterprise network engineering services. These services include components such as cyber security, cloud as well as big data.

This contract has a one-year base period and four one-year options, with an estimated maximum value of $85.0 million. CBP is consolidating the agency's networks to modernize and improve its operational efficiencies and security services. CSC will help CBP strengthen its cyber security capabilities.

Computer Sciences has also received a $41.1 million deal from the U.S. Department of Defense (DOD). Per the deal, CSC will supply information technology support services to the DOD's Naval Education and Training Professional Development and Technology Center till 2015.

As per the technology research firm, Gartner Inc. (NYSE:IT-Free Report), IT spending is expected to drop 0.1% this year to $449.5 million. Even though this has not affected CSC's business much, it does seem to indicate sluggishness in its number one served market.

Gartner had earlier projected 0.2% increase for the year, which is now being lowered because government agencies continue to face economic challenges. On the positive side, Gartner states that cloud computing continues to draw more business from operational capital expenditure. Gartner also believes that the main priorities will be mobile technologies, IT modernization and cloud computing.

Computer Sciences has its work cut out, given the increasing competition from BMC Inc. (Nasdaq:BMC-Free Report), as well as challenging macroeconomic conditions in Europe. In addition to this, a delayed order renewal process of the Federal government might make things difficult for the company, going ahead.

Computer Sciences holds a Zacks Rank #3 (Hold).

Investors can also consider SanDisk Corp (Nasdaq:SNDK-Free Report), which carries a Zacks Rank #1 (Strong Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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