On Jun 12, 2014,
Magellan Health Inc.
) scaled a new 52-week high of $62.17. The company's shares have
been riding high, mainly driven by its strong first-quarter 2014
earnings, product launches and adoption of inorganic growth
Magellan Health's first-quarter earnings of 92 cents per share
surpassed the Zacks Consensus Estimate by 21.05%. Although earnings
declined from the year-ago quarter, this healthcare services
provider had previously delivered positive earnings surprises in 3
of the last four quarters with an average beat of 21.56%.
Following Magellan Health's earnings release on Apr 29, 2014, its
shares gained 7.9% to close at $62.05 in the last trading session.
The year-to-date return from the stock was 3.56%, above Nasdaq's
return of 2.89%.
Magellan Health has been prudent in its investments, whether it was
regarding mergers, acquisitions, product launches or the upgrade of
its products and services. Over the past one year, the company made
significant alliances to enhance its service offerings. These
include collaboration with AlphaCare of New York in Aug 2013 and
Rethink Autism, Inc. in Sep 2013. Additionally, the company
received a notice of contract from the State of Florida in Sep 2013
to launch a Medicaid specialty health care plan. The company also
acquired Partners Rx® in Oct 2013 to enhance its Pharmacy Benefits
Management (PBM) capacities. Moreover, the acquisition of CDMI will
expectedly help the company generate tax benefit that will be
recognized over 15 years. This transaction is also expected to be
accretive to full-year 2014 earnings.
Apart from these, Magellan Health has been focused on launching
better products to strengthen its portfolio. NIA, a subsidiary of
Magellan Health, rolled out a clinical decision support application
in Nov 2013 for emergency department physicians, a new website for
consumers to access information about products and services in Feb
2014 and launched an Audit tool - MRxAudit - in Mar 2014 to
determine the efficiency of its PBM business. NIA also introduced
an animated website, RadZone Kids, to help parents prepare their
children for diagnostic imaging tests. All these are expected to
help the company attract more customers and thereby generate higher
Currently, Magellan Health carries a Zacks Rank #4 (Sell). However,
better-ranked players in the same industry include
Select Medical holdings Corporation
WellCare health Plans, Inc.
). While Select Medical and WellCare sport a Zacks Rank #1 (Strong
Buy), Centene has a Zacks Rank #2 (Buy).
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WELLCARE HEALTH (WCG): Free Stock Analysis
SELECT MEDICAL (SEM): Free Stock Analysis
MAGELLAN HLTH (MGLN): Free Stock Analysis
CENTENE CORP (CNC): Free Stock Analysis Report
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