With Medicaid And ACA Squared Away, Anthem Needs To Work On Medicare
Stephen Simpson, CFA
Stephen Simpson, CFA
WellPoint: New Name, Same Problems
Tue, May 24, 5:00 PM
- Gilead Sciences (NASDAQ:GILD) appoints former EVP of Commercial Operations Kevin Young as Chief Operating Officer and Martin Silverstein, M.D., as EVP, Strategy. Mr. Young has been a senior advisor to the company since 2014. Dr. Silverstein was most recently with Anthem (NYSE:ANTM) where he was EVP and Chief Strategy Officer.
- Paul Carter, EVP, Commercial Operations will depart.
Sun, May 22, 9:50 AM
- Quarrels have broken out behind the scenes of Anthem's (NYSE:ANTM) $48B proposed acquisition of Cigna (NYSE:CI) as the health insurers seek regulatory approval for their landmark deal, according to The Wall Street Journal.
- People on both sides say the squabbles could delay or derail antitrust approvals, which are typically harder to obtain if both parties aren't in sync.
- If completed, the deal would create the largest U.S. health insurer by members, with more than 54M, and $117B in annual revenue.
- Previously: Cigna warns Anthem deal may not close this year (May. 08 2016)
Tue, May 10, 1:50 PM
- Growth stocks have outperformed value stocks each year since 2007, but value investors are often rewarded after such periods. C.T. Fitzpatrick, the CIO of Vulcan Value Partners and the manager of Vulcan Value Partners Fund (MUTF:VVPLX), who has beaten the S&P 500 and its peers every year for the past five years gave his 4 value picks in an interview with Barron's.
- Oracle (NYSE:ORCL) is his top pick. Oracle and SAP (NYSE:SAP), both are leaders in the big enterprise market, but Oracle is in a better position with its applications plus database products along with being ahead in converting its customers to the cloud.
- National Oilwell Varco (NYSE:NOV) is a value pick since it generated tremendous free cash flow despite a poor quarter.
- Anthem (NYSE:ANTM) is a new addition since its business model is well-suited for the Affordable Care Act. Fitzpatrick believes that the company's stock price doesn't reflect the fundamentals.
- United Technologies (NYSE:UTX) gets interest as it has generated high free cash flow despite its bottom line being hurt by the strong dollar. Their accretion of cash is helping return on capital thereby making it a value pick.
- His top 10 holdings as of Dec. 31 are Oracle, Parker Hannifin (NYSE:PH), National Oilwell Varco, Franklin Resources (NYSE:BEN), Discovery Communication (NASDAQ:DISCK), Swiss RE AG, MasterCard (NYSE:MA), Cisco Systems (NASDAQ:CSCO), Anthem and Boeing (NYSE:BA).
Sun, May 8, 8:37 AM
- Due to the complexity of the regulatory process, Cigna (NYSE:CI) is cautioning that its acquisition by health-insurance rival Anthem (NYSE:ANTM) may not be approved this year, but could rather close in 2017.
- The two agreed to a $48B cash-and-stock merger deal last July. The transaction, along with Aetna's pending acquisition of Humana, would reduce the number of big U.S. health insurers from five to three.
Wed, May 4, 8:21 AM
- Anthem (NYSE:ANTM) promotes John Gallina, currently SVP, Chief Financial Officer for the Commercial and Specialty Business Division, to EVP and CFO effective June 1. He succeeds Wayne DeVeydt who will step down due to family commitments and philanthropic work. Mr. Gallina has been with the company since 1994.
Wed, Apr. 27, 9:47 AM
- Anthem (ANTM -3.2%) Q1 results: Revenues: $20,309.4M (+7.7%); Benefit Expense: $15,538.8M (+10.0%); SG&A: $3,200.2M (+1.7%); Net Income: $703M (-18.7%); EPS: $2.63 (-14.9%); Non-GAAP EPS: $3.46 (+10.2%); Quick Assets: $1,676M (-20.7%); CF Ops: $1,304.3M (-21.0%).
- 2016 Guidance: Operating Revenue: $81B - 82B; GAAP EPS: >$9.65; Adjusted EPS: >$10.80; CF Ops: >$3B; Medical Membership: 39.3M - 39.5M; Benefit Expense Ratio: 83.6% plus/minus 30 bps; SG&A Expense Ratio: 15.5% plus/minus 30bps.
Wed, Apr. 27, 6:02 AM
Tue, Apr. 26, 5:30 PM
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Fri, Apr. 15, 11:46 AM
- Celator Pharmaceuticals (CPXX +4.6%) initiated with Buy rating and $24 (63% upside) price target by Needham.
- Retrophin (RTRX -1.7%) initiated with Outperform rating and $25 (67%upside) price target by BMO Capital.
- Fate Therapeutics (FATE -3.2%) initiated with Outperform rating and $4 (85% upside) price target by BMO Capital.
- Tobira Therapeutics (TBRA +4.4%) initiated with Buy rating and $22 price target by H.C. Wainwright.
- Wright Medical Group (WMGI +2.4%) initiated with Buy rating and $23 (21% upside) price target by Bank of America.
- Cleveland Research rates UnitedHealth Group (UNH -0.9%) a Buy with a $155 (22% upside) price target; Anthem (ANTM -0.5%) a Buy with a $170 (20% upside) price target and Aetna (AET -0.4%) Neutral with a $120 (10% upside) price target.
- Glaukos (GKOS +0.3%) initiated with Hold rating by Stifel.
- Baxter International (BAX -0.3%) upgraded to Overweight from Neutral by Piper Jaffray. Price target raised to $58 (36% upside) from $39.
- Baird upgrades Exactech (EXAC +0.7%) to Outperform from Neutral and raises the price target to $26 (18% upside) from $21. Stryker (SYK -0.9%) downgraded to Neutral from Outperform and raises the price target to $116 (6% upside) from $111.
- Tenet Healthcare (THC -2.5%) upgraded to Positive from Neutral by Susquehanna.
- Clovis Oncology (CLVS -1.5%) downgraded to Neutral from Overweight by JP Morgan. Price target lowered to $15 (7% upside) from $42.
- AstraZeneca (AZN +0.3%) downgraded to Sell from Neutral by Goldman Sachs. Price target lowered to 3,700p (11% downside risk) from 4,400p.
- Intercept Pharmaceuticals (ICPT +0.2%) downgraded to Underweight from Equal Weight by Morgan Stanley. Price target lowered to $80 (48% downside risk) from $100.
Tue, Apr. 5, 10:28 AM
- First Data (NYSE:FDC): "Despite its favorable debt maturity schedule (nothing due until 2018) and modest interest rate sensitivity (only approximately 1/4 of debt is floating), FDC appears to have suffered collateral damage in the recent high-yield credit market carnage. Nonetheless, we remain encouraged by FDC's positioning within the payment-processing ecosystem and continue to believe the company is well positioned to benefit from the secular trend toward electronic payments."
- T-Mobile USA (NASDAQ:TMUS): "T-Mobile's improving cash generation coupled with ongoing subscriber momentum reinforces our outperform rating. The company appears on track for 20% EBITDA growth in 2016/17. We continue to believe TMUS's standalone story is attractive with M&A upside [long term]."
- HCA: "We are recommending shares of HCA given strong Q4 results, a robust outlook, improved Affordable Care Act enrollment trends, and an attractive valuation. HCA's Q4 beat and bullish FY2016 outlook, released on January 29, 2016, were far in excess of expectations. Nevertheless, the stock has re-traced only a portion of its post-Q3 losses. Besides the Q3 earnings challenges, the market remains concerned with the outlook for the ACA, balance sheet leverage and mixed competitor results, but those concerns appear overblown. The stock is now trading at just 7.1x '16E EBITDA, which is a discount to the company's/industry's historical averages of 7.6x/8.6x."
- Expedia (NASDAQ:EXPE): Expedia is "our top long-term idea. The company is well positioned to gain online-travel share from its leading travel brands, solid management execution, and strategic deployment of capital. We believe the HomeAway acquisition is highly accretive, based on leveraging HomeAway's unique inventory with Expedia's online optimization capabilities. As a result, we forecast superior earnings growth that should result in significant shareholder value, in our view."
- FedEx (NYSE:FDX): "FedEx is lauded for its speed and service in its core FedEx Express segment, where it possesses the leading market share in 'express' parcel delivery in the U.S., as well as a strong position in its emerging FedEx Ground segment, both of which (particularly Ground) are benefiting from an e-commerce tailwind, which we estimate is driving formidable revenue growth in business-to-consumer. Anticipating a gradual economic recovery in the US/globally, we expect margin expansion via improved efficiencies and capital utilization, coupled with a realignment plan likely to meet/exceed targeting improved annual profitability of $1.65 billion by FY16."
- CVS: "The company continues to do well in the PBM (pharmacy benefit management) segment, taking new market share ($12.7 billion net new business) while integrating the newly acquired Omnicare and Target pharmacies. We believe that CVS's focus around building solutions that span the continuum of care will resonate well with clients. Near term, the continued strength in new PBM business and acquisition synergies will likely drive the upside. CVS's focus on delivering shareholder returns in multiple avenues - earnings growth, share buybacks and dividends, makes it very attractive, especially in this turbulent market."
- Fidelity National Information Services (NYSE:FIS): "The SunGard integration appears ahead of plan; we would not preclude upside synergies (i.e., above $200 million FY17 exit rate). FIS currently trades at approximately 14x our FY17E EPS, which we believe remains attractive."
- Coach (NYSE:COH): "With Creative Designer Stuart Vevers' influence on full-price channel for five quarters and impact on outlet at approximately 90% this [past holiday season], we are starting to see signs of stabilization of Coach brand in North America. All in all, at 17% operating margins (31% just two years ago) and early signs of brand inflection, COH is playing better offense, despite moderation in growth of overall handbag category, and likely stands to benefit from biggest competitor KORS slowing."
- WESCO (NYSE:WCC): "We believe WCC's hires into key strategic leadership positions in recent years support improved guidance rigor and represent a long-term investment in deeper organizational productivity potential across sales & marketing, supply chain, and IT (new CIO most recently). WCC remains positioned to drive long-term market share gains in the fragmented U.S. electrical distribution market in our view, as nonresidential and industrial capex markets recover. We note meaningful leverage to a sustained and more broad-based recovery and attractive long-term investment characteristics."
- Anthem (NYSE:ANTM): "Overall, while the Exchanges continue to cause shorter-term pressure, we think improvements to this business, along with the potential accretion from Cigna remain attractive long-term catalysts for the company. As a result, we maintain our Outperform rating."
Mon, Mar. 21, 12:01 PM
- Anthem (ANTM -1.6%) sued Express Scripts (ESRX -1.4%) earlier today to recover damages for pharmacy pricing that it says is higher than competitive benchmarks. The company says the pharmacy benefits manager has failed to negotiate in good faith to ensure that Anthem receives competitive pricing, despite its efforts address the issue for more than a year. Anthem says it is owed $3B, a figure Express Scripts chief George Paz says he has "no clue" where it comes from.
- Anthem also says it has not yet made a decision on whether to terminate its contract with the company.
- Previously: Express Scripts still squabbling with Anthem over drug discounts (Feb. 18)
Thu, Feb. 18, 4:35 PM
- Anthem (NYSE:ANTM) declares $0.65/share quarterly dividend, 4% increase from prior dividend of $0.625.
- Forward yield 2.03%
- Payable March 25; for shareholders of record March 10; ex-div March 8.
Thu, Feb. 18, 10:35 AM
- Behemoth pharmacy benefits manager Express Scripts (ESRX -0.7%) has apparently made scant progress in its contentious negotiations with its largest customer, Anthem (ANTM +1.1%), over drug discounts. In its earnings call yesterday, CEO George Paz said he "has no clue" where the $3B that Anthem says it is owed in additional prescription drug savings under their 10-year contract comes from.
- The risk that ESRX may lose its largest client when their contract ends after 2019 has weighed on its stock price. Shares are down over 20% this year. Even if they resolve their differences, though, Anthem may still bid adieu if its merger with Cigna (CI +0.4%) goes through (likely) and it decides to manage prescriptions internally, a move that UnitedHealth (UNH +0.7%) has already done.
- Anthem represents 14% on ESRX's revenue but much less of its profit. It processed almost 1.3B claims last year and will most certainly process over 1B claims annually beyond 2019 exclusive of Anthem.
- Previously: Anthem to acquire Cigna for $54.2B (July 24, 2015)
Fri, Feb. 12, 7:59 AM
- Health insurer Anthem (NYSE:ANTM) establishes coverage of Novocure's (NASDAQ:NVCR) Optune for the treatment of newly diagnosed glioblastoma. Anthem, covering 38.5M lives, is the fourth commercial payer to cover the use of the product.
- Optune is a non-invasive device that creates alternating "wave-like" electric fields called Tumor Treating Fields (TTFields). It delivers its therapy to brain tumors through four transducer arrays placed on the scalp.
- Shares are up 3% premarket but only on 200 shares.
Wed, Jan. 27, 7:51 AM
- Anthem (ANTM -0.6%) Q4 results: Revenues: $20,023.7M (+6.6%); Benefit Expense: $16,315.5M (+9.8%); SG&A: $3,268.4M (+7.8%); Net Income: $180.9M (-64.3%); EPS: $0.68 (-62.2%); Non-GAAP EPS: $1.14 (-38.7%).
- FY2015 results: Revenues: $78,404.8M (+7.4%); Benefit Expense: $61,116.9M (+7.5%); SG&A: $12,534.8M (+6.7%); Net Income: $2,560M (unch); EPS: $9.38 (+4.3%); Non-GAAP EPS: $10.16 (+8.7%); Quick Assets: $2,113.5M (-1.8%); CF Ops: $4,116M (+22.2%).
- 2016 Guidance: Operating Revenue: $80B - 81B; GAAP EPS: >$10.35; Adjusted EPS: >$10.80; CF Ops: >$3B; Medical Membership: 38.8M - 39M; Benefit Expense Ratio: 83.6% plus/minus 30 bps; SG&A Expense Ratio: 15.4% plus/minus 30bps.
Wed, Jan. 27, 6:03 AM
- Anthem (NYSE:ANTM): Q4 EPS of $1.14 misses by $0.06.
- Revenue of $20.02B (+6.6% Y/Y) beats by $120M.
Anthem, Inc. provides life, hospital and medical insurance plans. It offers a broad spectrum of network-based managed care health benefit plans to the large and small employer, individual, Medicaid and Medicare markets. The company operates through three segments: Commercial and Specialty... More
Industry: Health Care Plans
Country: United States