CHICAGO, Nov. 26, 2014 /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 the UnitedHealth Group Inc. (NYSE:UNH-Free Report), Aetna Inc. (NYSE:AET-Free Report), Cigna Corp. (NYSE:CI-Free Report), Humana Inc. (NYSE:HUM-Free Report) and Centene Corp. (NYSE:CNC-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday's Analyst Blog:
The Real Winners of Obamacare
The second open enrollment season of the Affordable Care Act is now in full swing. The landmark healthcare reform faced stiff opposition from several quarters when it was first launched on Oct 1, 2013. Since then, it has gone from strength to strength.
In some cases, it has turned some of its most fervent critics into supporters, notably health insurers. This is a significant development, given their initial discomfort with the law. Now, they are playing a key role in ensuring its success going forward.
Initial Friction
In fact, President Obama had alleged insurers were inflating profits and removing coverage for individuals afflicted by disease. These feelings were reflected by the insurance industry, which perceived the administration with suspicion.
They believed the government was levying taxes, fees and numerous legislations which were superfluous. Insurers were wary of the fact that payment rates could be reduced at any time and profit margins forcibly reduced downward.
Symbiotic Relationship
However, over time, the relationship between the government and the insurance industry has become symbiotic in nature. This has become crucial to the success of the country's biggest healthcare plans. It has also fuelled the sharp increase in Medicaid enrollments, which have been a profitable one for insurers.
Health insurers have provided the administration with assistance during several litigations over the ACA. Additionally, in 2013, UnitedHealth Group Inc. (NYSE:UNH-Free Report) assisted in the repair of the enrollment website following its crash during the first days of its rollout.
Share Prices Jump
Ever since the ACA was signed into a law, the share prices of the four largest insurers have jumped significantly, Aetna Inc. (NYSE:AET-Free Report), Cigna Corp. (NYSE:CI-Free Report), Humana Inc. (NYSE:HUM-Free Report) and UnitedHealth have increased over 100%. In comparison, the S&P 500 has risen around 70%.
These stocks have also clocked up significant gains over the 13 months since the rollout of the Obamacare exchanges. Over the same period, Humana has gained 49.8%, Cigna has gained 33.2% and Aetna has increased 35.8%.
Enrollment, Revenue Share Rises
According to UnitedHealth Group chief executive Stephen J. Hemsley, Medicaid enrollment has increased by 24% or around 1 million individuals. Recently, WellPoint said the company has added 699,000 new members from Medicaid and 751,000 subscribers via healthcare exchanges.
In fact, Medicaid enrollment for the company has risen 16%, amounting to five million people. WellPoint's chief executive Joseph R. Swedish said that government business contributed to 45% of consolidated operating revenues.
In its third quarter earnings report, Aetna said the company had experienced "excellent performance in our government business, which now represents more than 40% of our health premiums." According to Humana, Medicaid Advantage plans provide 65% of its revenues. For the year ended Sep 30, enrollment for these plans increased by 17.5% to 2.9 million.
Our Choices
The reliance of the government on private insurers to ensure the successful implementation of the ACA has increased over time. Industry watchers expect this trend to continue. Below we present two stocks which will gain from these trends, each of which also has a good Zacks Rank.
Centene Corp. (NYSE:CNC-Free Report) offers programs and services to individuals without insurance and those who are uninsured. Centene provides services through local staff that provide assistance in accessing care and coordinating referrals to services. The company also clarifies member concerns and addresses their questions. The company also has programs to educate and inform members to help them get access to suitable healthcare services.
Centene Corp. holds a Zacks Rank #2 (Buy) and has expected earnings growth of 50%. The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 22.29.
UnitedHealth Group is a diversified health and well-being company. The company reports through four segments. Its largest segment is UnitedHealthcare, which accounts for approximately 77.0% of 2013 revenues. One of its units, UnitedHealthcare Community & State, provides network-based health and well-being services to beneficiaries of State Medicaid and Children's Health Insurance Programs and other government-sponsored healthcare programs.
Apart from a Zacks Rank #2 (Buy), the company currently has expected earnings growth of 2.6%. At the same time, stock price has increased 28.7% year to date. Additionally, yearly earnings consensus has increased 6 cents over the last 60 days. UnitedHealth has a P/E (F1) of 17.15x.
The extent of Obamacare's success has been proven over time. Health insurers have also gained from this trend and seem to be integral to its long-term success. This is why these stocks would make good additions to your portfolio.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock 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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on UNH - FREE
Get the full Report on AET - FREE
Get the full Report on CI - FREE
Get the full Report on HUM - FREE
Get the full Report on CNC - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
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.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/the-zacks-analyst-blog-highlights-unitedhealth-group-aetna-cigna-humana-and-centene-300001580.html
SOURCE Zacks Investment Research, Inc.
Related Links
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article