The Zacks Analyst Blog Highlights: Magellan Health Services, Ford Motor, Toyota Motor, General Motors and Volkswagen

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Aug 20, 2013, 09:30 ET

CHICAGO, Aug. 20, 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 Magellan Health Services Inc. (Nasdaq:MGLN-Free Report), Ford Motor Co. (NYSE:F-Free Report), Toyota Motor Corporation (NYSE:TM-Free Report), General Motors (NYSE:GM-Free Report) and Volkswagen AG (OTC:VLKAY-Free Report).

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Here are highlights from Monday's Analyst Blog:

Magellan Health Allies with AlphaCare

Last week, Magellan Health Services Inc. (Nasdaq:MGLN-Free Report) inked a deal with New York based AlphaCare to make investments and subsequently own 65% stake in the latter. This agreement also marks Magellan Health's foray into the New York market.

Founded in 2012, AlphaCare is a Medicaid Managed Long Term Care HMO and Medicare Plan providing service to New York's long-term care and dual eligible populations. AlphaCare obtained necessary license and contracts in New York State, including an HMO license as well as a managed long term care contract with the state. It operates a Managed Long-Term Care Plan in Bronx, Kings, New York, Queens and Westchester Counties and Medicare Plans in Bronx, Kings, New York and Queens Counties. It started enrolling members this August.

Magellan Health, with its suite of products and services, expects to offer better health care at reasonable costs. This in turn will help it expand its customer base, so as to eventually help the company ramp up its growth profile.

Magellan Health has a long standing relation with AlphaCare. It already holds 7% equity stake via its previous equity investment of $2 million in preferred membership units of AlphaCare's current holding company, AlphaCare Holdings LLC. Additionally, Magellan Health also loaned $6 million to AlphaCare Holdings, LLC. Following the current investment, Magellan will have $25.5 million invested in AlphaCare.

Magellan will have an option to buy the remaining stake of AlphaCare at a price determined by an agreed upon formula beginning on Jan 1, 2017. AlphaCare's shareholders also will have the right to sell their stake to Magellan or to AlphaCare beginning on Jan 1, 2017 with the same agreed upon formula. They will also have the additional right, subject to certain conditions, to sell 50% of interest to Magellan or AlphaCare prior to Jan 1, 2017, this time at a price determined by a different agreed upon formula.

Ford Upgrades C-MAX Hybrid

Ford Motor Co. (NYSE:F-Free Report) recently revealed that it is upgrading its 2014 C-MAX Hybrid, which will hit the stores in December this year. The automaker is eyeing the top rank in the hybrid market with fuel efficient vehicles. The new version of C-MAX Hybrid offers better fuel efficiency, thus providing greater satisfaction to customers.

The new Ford C-MAX Hybrid features upgraded powertrain software together with favorable hardware changes. The hardware modifications include changes in the gearing, which will make the transmission drive ratio more efficient.

Further changes include new hood seal, front and rear tire deflectors, pillar moldings and addition of rear lift gate deflectors, which will boost the aerodynamics of the vehicle. The 2014 C-MAX Hybrid is also equipped with new engine oil, which will help in reducing friction.

Ford is also changing the pattern of testing miles-per-gallon label for C-MAX Hybrid. Initially, testing of the Fusion Hybrid would generate fuel efficiency labels for many vehicles including C-MAX Hybrid, in accordance with EPA's General Label rules. However, now Ford will test and label C-MAX Hybrid separately, leading to a decline in the miles-per-gallon label for the original 2013 C-MAX Hybrid.

The 2013 Ford C-MAX Hybrid will now carry an EPA combined fuel efficiency value of 43 mpg, which is the best in the class and surpasses Toyota Motor Corporation's (NYSE:TM-Free Report) Prius v, which has a combined label value of 42 mpg. As a result of the change in the miles-per-gallon values, the automaker is making a goodwill payment to current C-MAX Hybrid owners to compensate for the estimated difference in the average fuel costs of the two labels. Ford will pay $550 to owners and $325 to people who leased the vehicles.

Ford is benefiting from the strong sales of C-MAX Hybrid and C-MAX Energi plug-in hybrid. Customers prefer C-MAX as it is more luxurious with innovative features.

Electrified vehicles sales increased 392% to 53,014 vehicles in July. Ford's electrified vehicle market share in the first seven months of 2013 increased 12 points year over year to 15.4%.

Ford currently carries a Zacks Rank #2 (Buy). Other major automobile stocks worth considering are General Motors (NYSE:GM-Free Report) and Volkswagen AG (OTC:VLKAY-Free Report). Volkswagen carries a Zacks Rank #1 (Strong Buy) and General Motors carries a Zacks Rank #2 (Buy).

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