Health Insurance Stocks: 4 Stocks Being Dumped by Big Money Managers

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(Written by Rebecca Lipman. List compiled by Eben Esterhuizen, CFA. Institutional data sourced from Fidelity.)

Pollsters at Gallup and Healthways found the percentage of Americans with employer-sponsored healthcare dropped to a record low of 44.5% in the third quarter this year – a drop of 5.3% in 3 years.

The poll, conducted between July 1st and September 30th, highlights a direct threat to the $2.6 trillion US health-care industry, which is heavily reliant on employer-sponsored insurance plans.

Industry analysts have attributed unemployment, underemployment and an increased number of companies who do not offer health insurance as the root cause of the drop.

The poll found that employers have also scaled back benefits and raised employee charges to cope with rising health-care costs, report Reuters.

“As employer-sponsored health insurance declined, the number of adults with no health insurance at all rose 2.7 percentage points to 17.3 percent in the third quarter.” However coverage of those aged 18 to 26 is higher due to newer U.S. health-care changes that allow parents to cover grown children under their insurance plans.

Investing Ideas

It is clear that the U.S. health insurance system is going through significant change. As CNBC points out, governments and businesses have and will continue to cut back and/or reform their health coverage offerings.

So, we’re wondering: Which health insurance providers are most vulnerable to these volatile times for the industry? For ideas, we collected data on institutional money flows, and identified a list of health insurance providers that have seen significant institutional selling during the current quarter.

Big money managers appear to be concerned about the competitiveness of these companies in the rapidly changing healthcare insurance industry. Do you agree?

Use this list as a starting point for your own analysis.

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1. Express Scripts Inc. (ESRX): Provides a range of pharmacy benefit management (PBM) services in North America. Net institutional sales in the current quarter at -20.6M shares, which represents about 4.27% of the company's float of 482.70M shares.

2. AMERIGROUP Corporation (AGP): Operates as a multi-state managed healthcare company. Net institutional sales in the current quarter at -4.0M shares, which represents about 8.57% of the company's float of 46.65M shares.

3. Health Net Inc. (HNT): Provides managed health care services through its health plans and government-sponsored managed care plans. Net institutional sales in the current quarter at -4.6M shares, which represents about 5.33% of the company's float of 86.24M shares.

4. Magellan Health Services Inc. (MGLN): Provides managed behavioral healthcare, radiology benefits management, specialty pharmaceutical management, and Medicaid administration products and services in the United States. Net institutional sales in the current quarter at -1.9M shares, which represents about 8.07% of the company's float of 23.54M shares. 



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Insurance , Stocks

Referenced Stocks: ESRX , AGP , HNT , MGLN

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