The Aetna-Humana Deal: Must-Know Risks to Consider
On July 3, 2015, Aetna announced the acquisition of its peer, Humana (HUM), for a consideration of $37 billion.
Centene–Health Net Deal: Potential Risks
With the health insurance industry witnessing a wave of consolidations, it is expected that a majority of acquirers may risk overpaying for their targets.
Analysts’ Recommendations for Anthem in 2017
Based on the company’s performance in 1Q17, Anthem (ANTM) has increased its 2017 revenue guidance by around $1.5 billion.
Healthcare Sector Updates for May 22–26, 2017
If the US Senate passes the AHCA, the CBO estimates that ~23 million people could become uninsured by 2026. The CBO projects that Medicaid spending could fall $880 billion in the next ten years.
Medicaid Enrollments Drove Centene’s Revenues in 2015—But Which Way?
In 4Q15, Centene’s Medicaid enrollments witnessed a solid YoY growth of about 24.5%, reaching about 5 million.
UnitedHealthcare Adds 1.6 million Enrollments Year-over-Year
UnitedHealthcare grew its Medicare business by 3,80,000 new enrollees, with enrollments distributed almost evenly between MA (Medicare Advantage) and supplemental Medicare plans.
Centene’s Hunt for New Growth Opportunities in Existing Markets
Centene believes that if all its existing markets adopt Medicaid expansion, it would result in 4 million additional members becoming eligible for Medicaid.
Managing the Revenue Expectations for Centene’s New Market Entry Strategy
To ensure high-profit margins through 2017, Centene plans to enter new markets across its Medicaid, long-term care, and correctional health businesses.
Centene and Wellcare Health Plans: The Word on Wall Street
Wall Street analysts expect an upside potential of 53.80% for Centene (CNC), based on the company’s trading price of $51.06.
Centene’s Specialty Services Strategy Portfolio: Backbone or Achilles Heel?
Centene has developed a specialty services portfolio that reduces the company’s over-reliance on Medicaid and other state-sponsored businesses.
XLV Gains May 10, Trades above Its 20-Day Moving Average
On May 10, 2016, the top gainers of XLV were Allergan (AGN) and Regeneron Pharmaceuticals (REGN). They rose by 5.3% and 2.8%, respectively.
Key Takeaways from Centene’s 1Q15 Earnings Release
Centene (CNC) posted its 1Q15 earnings on April 28, 2015. The company beat the Wall Street diluted EPS estimates of $0.49 with a posted EPS of $0.52.
David Tepper’s Appaloosa: Analyzing Its Top Holdings
In the third quarter, David Tepper’s Appaloosa included three new stocks, exited five securities, and increased its stake in the existing eight stocks.
Healthcare Stocks to Watch Amid the ACA Constitutionality Debate
On July 9, the Affordable Care Act’s constitutionality was debated in the US Court of Appeals. How did healthcare stocks react?
This Rebate Decision Saw Health Insurers Soar Yesterday
On Thursday, the Trump administration announced the withdrawal of the proposal to abolish rebates paid to pharmacy benefit managers by drugmakers.
What’s Centene Expecting of Its Medicare and Medicaid Businesses?
On its first-quarter earnings conference call, Centene (CNC) guided for almost flat MA (Medicare Advantage) memberships in 2019.
Comparing Expense Trends for CNC and HUM in 2019
In its first-quarter earnings press release, Centene (CNC) reiterated its 2019 HBR (health benefits ratio) guidance of 86.5%–87.0%.
Comparing EPS Growth Trends for CNC and HUM in 2019
In its first-quarter earnings press release, Humana narrowed its 2019 non-GAAP EPS guidance due to the better-than-expected performance of its Retail segment.
Comparing CNC’s and HUM’s Revenue Growth Trends in 2019
In its first-quarter earnings press release, Centene (CNC) revised its 2019 revenue guidance upward to $72.8 billion–$73.6 billion.
What Analysts Are Recommending for CNC and HUM in May
Analysts’ consensus recommendations for both Centene and Humana are “buys.”
Why Dan Loeb’s Third Point Has Built a Stake in Centene
On May 24, the Wall Street Journal reported that Daniel Loeb’s Third Point had built a stake in health insurer Centene (CNC).
Centene Revises Its 2019 EPS Guidance Upward
On its first-quarter earnings conference call, Centene (CNC) guided for 2019 adjusted diluted EPS of $4.24–$4.44.
Centene Revises Its 2019 Revenue Guidance Upward
On its first-quarter earnings conference call, Centene (CNC) guided for 2019 revenue in the range of $72.8 billion–$73.6 billion.
What Are Analysts Recommending for CNC and UNH?
The 12-month consensus recommendation for both Centene and UnitedHealth Group is a “buy.”
A Look at Synergies from the Centene-WellCare Deal
Centene expects the combined company to be the number one player in the Medicaid business.
Centene’s Fidelis Acquisition on Track to Achieve Synergy Targets
On July 2, 2018, Centene (CNC) issued a press release announcing the completion of the acquisition of Fidelis Care, a leading government health plan in New York City,
Here Is a Key Differentiator for Centene in Fiscal 2019
Centene (CNC) highlighted its position as the national leader in the health insurance marketplace business with a presence in 16 states in the US.
CNC or UNH: Who Has Better Earnings Growth Prospects?
In its fourth-quarter earnings conference call, Centene (CNC) guided for fiscal 2019 GAAP diluted EPS of $3.65–$3.83.
Revenue Growth Prospects: What to Expect from CNC and UNH
In fiscal 2018, Centene (CNC) reported revenues of $60.12 billion, a YoY rise of 24.25%.
Centene’s Acquisition of WellCare Health Plans: The Must-Knows
Today, Centene (CNC) issued a press release announcing its plan to acquire WellCare Health Plans (WCG) for a total consideration of $17.3 billion.
Medicaid Business—A Key Revenue Driver for WellCare Health Plans in 2017
In 1Q17, WellCare Health Plans’ (WCG) Medicaid business reported revenues close to $2.6 billion, which equals year-over-year growth of ~11.8%.
Healthcare Moves Have Been Muted, but Could We Get a Surprise?
Rising interest rates don’t negatively affect healthcare as much as some other industries. But it has still underperformed since the US elections.
Why Anthem’s Benefit Expense Ratio Rose in 1Q17
Expense guidance for 2017 For full-year 2017, Anthem (ANTM) has projected the medical cost trend for its local group business to fall in the range of 6.5%–7.0%. To learn more about medical cost trends, please see Medical cost trend means rising premiums for health insurance. If Anthem’s actual medical cost trend for full-year 2017 turns out […]
Why Centene’s Health Benefit Ratio Improved in 1Q17
Centene (CNC) has projected its health benefit ratio (or HBR) for the full year 2017 to fall in the range of 87.0% to 87.5%.
Centene Saw Robust Rise in Medicaid Enrollments in 1Q17
In 1Q17, around 12.1 million members were enrolled in Centene’s (CNC) various healthcare plans, which is a year-over-year (or YoY) rise of around 600,000 beneficiaries.
Is It Time to Offload High Yield Bond Mutual Funds?
High yield bonds are closer in behavior to equities than other types of bonds. Year-to-date in 2016, WHIAX has fallen 4.3%, and the S&P 500 has fallen 4.5%.
Will Increasing Scale and Diversification Boost Centene’s Revenues?
After the closure of Centene-Health Net Deal, Centene expects to benefit from increased scale of operations and diversification of revenue base.
What Subsidy Eligible Membership Could Mean for Centene’s Public Exchange Revenues
Centene managed to increase its public exchange membership from 75,000 members in 2015 to 146,000 members in 2015.
How Did Centene’s Geographical Diversification Strategy Boosts Pan out for Its 4Q15 Earnings?
Centene posted its 4Q15 and 2015 earnings on February 09 and reported diluted operating EPS attributable to common shareholders of about $2.89 for 2015.
High-Yield Bond Funds Witness Inflows, Yield on Bonds Fell
Investor flows into high-yield bond funds were positive in the week ended January 29, 2016, after three consecutive weeks of outflows.
Junk Bond Issuance Has Gained Traction
The strong secondary market performance of the junk bond issues priced so far in 2016 built investor confidence. It helped them take positions in low quality and highly leveraged junk bonds.
Humana Acquisition Could Be Aetna’s Key Long-Term Growth Driver
Aetna’s Humana acquisition is mainly aimed at increasing the combined companies’ exposure to the high-growth Medicare business. The deal is currently being scrutinized by antitrust regulators.
Centene’s Revenue and Income Rose in 3Q15
Centene has reported net revenue of $5,821 million in 3Q15, an increase of 5.7% compared to $5,506 million in 2Q15. Operating revenue increased 5.8% in 3Q15.
Is UnitedHealth Group a Better Partner for Cigna?
Based on market capitalization, UnitedHealth Group appears to be a stronger partner for Cigna.
Synergies in Centene’s Acquisition of Health Net
Centene projects that Health Net’s acquisition will help Centene realize pre-tax synergies worth $150 million by the end of the second year after the closure of the deal.
Analyzing the Market’s Response to the Centene–Health Net Deal
The Centene–Health Net deal is expected to be completed by early 2016, pending approval by the shareholders of both companies.
Centene–Health Net Entity Could Be Medicaid Leader
Centene aims to position itself as a leader in the fast-growing Medicaid market. Health Net’s acquisition will add ~1.7 million Medicaid members to the company’s portfolio.
Centene Announces Its Acquisition of Health Net
On July 2, Centene announced the acquisition of Health Net for a combination of cash and shares amounting to $6.8 billion. This includes the assumption of Health Net’s $500 million debt.
What Are Centene’s Key Risks?
Centene (CNC) faces a unique combination of business risks as well as risks specific to the health industry (IYH). Centene has a highly concentrated business mix.
Medical Care Ratio – Centene Compared to Its Peers
For health insurance companies, the medical care ratio is the ratio of total money spent on healthcare claims to premiums earned—adjusted for tax and regulatory expenses.
Anthem’s Medical Care Ratio Improves, Boosts Profit Margin
Anthem’s medical care ratio declined from 87.8% in 2013 to 83.1% in 2014, as a result of its favorable enrollment mix.
Specialty Services: How Does Centene Manage Them?
Aside from the standard healthcare policies, players—like Centene—in the private health insurance industry (IYH) also offer specialty insurance.
What’s Centene’s Business Strategy?
Centene’s business strategy focuses on improving the quality of its services. It provides services to the uninsured and underinsured population in 22 states in the US.
What Are Centene’s Key Business Segments?
Centene operates local health plans. Its Managed Care segment offers health insurance services to individuals through government-subsidized programs.
Centene: Insurance Exchange Opportunity and Hybrid Plans
In 2014, Centene entered into a contract with Arkansas to participate in a hybrid Medicaid program. The program is expected to expire in December 2015.
Cigna Diversifies Via Mergers and Acquisitions
Among Cigna’s major strategic mergers and acquisitions was HealthSpring, acquired in 2012 for a consideration of $3.8 billion.
Anthem’s Key Business Segments
In 2014, of Anthem’s three business segments, Commercial and Specialty accounted for 53.7% of total revenues, and Government Business contributed 46.3%.
Anthem: One of America’s Largest Health Insurance Providers
Anthem provides health benefits and services to about 69 million people through its affiliated companies. It came 38th in the 2014 Fortune 500 rankings.
Must-Know: Aetna’s Key Mergers and Acquisitions
Aetna’s M&A strategy is mainly targeted at expanding the company’s markets and building its technology capabilities.
Cigna: Medicare and Medicaid Beneficiaries Top Earners
Most of Cigna’s revenue comes from insurance for employer-sponsored as well as Medicare and Medicaid beneficiaries.
Shift to self-insurance plans affects health insurance stocks
As hospital utilization remains low, more employers are exploring the option of self-insurance to reduce their employee benefit costs.
The rise in insurance demand can benefit managed care stocks
With 26 million uninsured people expected to gain insurance by 2017 due to the Affordable Care Act, the US is seeing a rise in health insurance demand.
Molina Healthcare: Why Medicaid growth should directly help Molina
Molina Healthcare, Inc. (MOH): Market overview Medicaid is a rapidly growing segment within healthcare, which should directly benefit MOH. In addition to typical market growth of mid-single digits, there are several supplemental drivers. Healthcare reform (Obamacare) Under current reform provisions starting 2014, Medicaid would expand coverage to additional 11 thousand uninsured. Based on its presence within […]
Molina Healthcare: Why Molina’s revenues have been growing fast
Molina Healthcare, Inc. (MOH): Revenue growth In general, Medicaid health plans grow revenue by increasing their membership or generating higher rates from state governments. The latter portion is often left up to negotiations between plans and states. States often have the final say, but given cost savings managed care can generate, they are loathe to bring […]
Molina Healthcare: The company’s foothold in a growing market
As one of the leading Medicaid-focused HMOs, MOH enjoys a strong foothold in one of the healthcare sector’s fastest-growing markets.