As the markets continue to seesaw back and forth, investors continue to wonder where the trends will be heading next. Will the pundits who are forecasting crash be correct? Will the "Dow 20,000" people see their predications bear fruit? For normal investors, both of these sides are scary because they represent opposite extremes that could absolutely obliterate your portfolio if on the wrong side of the trade. Ultimately, this is why I favor good, quality stocks that have defensive characteristics to help ward off downside pressures. Today we will analyze a health insurance company named eHealth, Inc. (NASDAQ:EHTH). The company is a provider of online health care plans for businesses, individuals and families alike. The company offers specialty plans such as short-term health insurance, student health insurance and preferred provider plans.
Turning to the fundamentals, eHealth has a market cap of $705.26 Million and is currently a 'buy' from analysts. The company has no price to earnings and a forward price to earnings of 92.47, showing the company is expected to reach profitability within the next year. Price to sales is at 3.77, price to book is at 5.14, price to cash is at 7.18, and price to free cash flow is at 76.66. The company has no debt and cash per share of 5.16, giving the company a solid current ratio of 4.5.
Earnings are expected to decline 73.5 percent this year, rise 301 percent next year, and rise 17.53 percent over the next five years. It is important to note that eHealth's short float is at 9.12 percent and likely to continue amassing short sellers due to lackluster performance year-to-date. The stock is up 54.5 percent in the past year, but down 20.24 percent year-to-date.
This stock certainly is a bit of a curveball and confusing for new investors. On one hand, the company has no debt, a ton of cash, decent future earnings estimates, and will reach profitability within the next year. However, the not so good news is that earnings are expected to decline this year, short interest is creeping up and the stock has been in a downtrend since start of the year. That being said, the health insurance industry is getting a dramatic overhaul thanks to the Affordable Care Act and more people are signing up for health insurance to avoid fees and penalties. Additionally, people that want the bare minimum coverage to avoid government fees could turn to short-term health care plans, which have been extremely popular in the past year. These short-term health care plans will continue to see demand as enrollment periods open up and people scramble to get covered. Overall, I think there are some characteristics to like here with eHealth. Be sure to do your own research before investing.