Aetna to acquire Humana for $37 billion; Humana stock rises 4.34%
Humana (HUM) has a weight of 1.21% in the Health Care Select Care SPDR ETF (XLV). With a market cap of ~$27 billion, Humana is one of the leading companies in the healthcare service subgroup. HUM stock rose 4.34% for the period August 25–31, 2015.
Humana has been in the news recently. Aetna (AET) has announced it will acquire Humana for $37 billion. HUM declared a dividend of $0.29 per share payable on October 30, 2015. The stock closed at $182.79 on August 31.
The above graph reflects the performance of Humana (HUM), XLV, and AET on a month-over-month basis. Year-to-date, HUM has given a return of ~27% and outperformed XLV. HUM’s best performance for the year came in the month of May 2015 with a return of 28.34% on the takeover news. The worst month year-to-date was June 2015 when HUM stock fell 10.26% on profit booking.
Humana’s moving averages and valuations
The average PB (price-to-book) value of the healthcare service sector is 3.08x. With its current price, Humana (HUM) is trading at 2.69x, which is below the industry average. HUM stock closed at $182.79 on August 31, but the stock is still trading below its 20-day, 50-day, and 100-day moving averages. It’s trading closer to the mid-Bollinger band price of $184. If the downward trend continues, it might end up in an oversold position.