On Jun 27, 2013,
) hit a 52-week high of $63.82. The momentum was driven by
continued strong execution by the company. It has been reporting
solid earnings for the past several quarters and is expected to
do so given a huge amount of investments and acquisitions.
Aetna's execution over the last few years has been excellent.
Performance has been strong across the board fueled by both
acquisition-driven and organic growth.Aetna has made huge
investments in technology upgrades and acquisitions.
The company has positioned itself strongly in the Medicaid
market by acquiring Coventry. The acquisition is expected to
enhance the company's footprint in the Medicaid market, giving it
more credibility. It also positions the company better for
Medicaid RFP, expansion and dual growth opportunities.
It has also made a number of acquisitions in its Commercial
business over the past 2-3 years.
Aetna is poised to benefit from growth in Medicaid and
Medicare network segments, a fast-growing health services segment
and an expanding provider network. It is also aggressively
forming Accountable Care Organizations to generate incremental
We also have a growing optimism for international growth
opportunities at Aetna. The company is aggressively entering
foreign markets. It is targeting Asian markets like India and
China both of which present huge potential growth.
Moreover, a strong balance sheet with an efficient capital
management program provides inherent strength. The company is
also witnessing an increase in membership.
Additionally, valuation for Aetnalooks attractive. While the
shares are trading at a discount to the peer group average on a
forward price-to-earnings basis and at a modest premium on a
price-to-book basis, return on equity is 17.4% higher than the
peer group average. Moreover, the 1-year return from the stock
was 52.5%, much above the S&P's return of 20.3%.
Aetna carries a Zacks Rank # 1 (Strong Buy)..Other life
Molina Healthcare, Inc.
) with a Zacks Rank #1 and
) with Zacks Rank #2 (Buy) are worth considering.
AETNA INC-NEW (AET): Free Stock Analysis
CIGNA CORP (CI): Free Stock Analysis Report
CENTENE CORP (CNC): Free Stock Analysis
MOLINA HLTHCR (MOH): Free Stock Analysis
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