Aetna Reaches New 52-Week High - Analyst Blog
04 Aprile 2013 - 7:30PM
Zacks
On Apr 3, 2013, shares of Aetna Inc. (AET) hit
a 52-week high of $55.62.
Aetna completed the sale of its Missouri Medicaid business,
called Missouri Care, to WellCare Health Plans,
Inc. (WCG) as a part of proposed acquisition of
Coventry Health Care, Inc. (CVH). The deal is a
net positive for Aetna since in exchange of foregoing 100,000,
members served by Missouri Care, Aetna will gain access to 250,000
members served by Health Care USA.
Aetna also announced a four-year reinsurance agreement with
Vitality Re IV Limited, a newly-formed special purpose insurance
company based in the Cayman Islands in January. The transaction is
expected to release capital held with respect to Aetna's commercial
group health business, thereby effectively meeting the risk-based
capital requirements set by state regulators.
Also, to return more value to shareholders, in February, the
Board authorized Aetna to buyback additional $750 million
shares.
Aetnais aggressively looking to generate incremental fee
revenues from Accountable Care Solutions (ACO). On Mar 11, 2013,
Aetna announced the formation of an ACO with ProHealth Physicians,
Inc. Previously, in January, the company agreed to form an ACO with
Texas Health Resources.
Previously, Aetna reported positive earnings surprise in 2 of
the 4 quarters in 2012, with an average beat of 3.53%. The Zacks
Consensus Estimate for the company’s first quarter of 2013 is
currently pegged at $1.40 per share, representing a year-over-year
increase of 4.64%. Aetna guided FY13 operating earnings per share
to a minimum of $5.40.
The valuation of Aetna looks attractive. The shares are trading
at a 7.4% premium to peer group average on a price-to-book value
basis and at a discount of 16.1% on a price-to-earnings. The return
on equity of 16.9% is 37.4% higher than the peer group average of
12.3%.
Aetna carries a Zacks Rank #2 (Buy). Another healthcare stock
worth considering is Health Net Inc. (HNT) – Zacks
Rank #1 (Strong Buy).
AETNA INC-NEW (AET): Free Stock Analysis Report
COVENTRY HLTHCR (CVH): Free Stock Analysis Report
HEALTH NET INC (HNT): Free Stock Analysis Report
WELLCARE HEALTH (WCG): Free Stock Analysis Report
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