On May 30, 2013, the shares of Humana Inc. ( HUM ) hit a new 52-week
high of $83.40. The momentum was driven by strong first-quarter
earnings of this Zacks Rank #2 (Buy) stock, which recorded a 51%
positive earnings surprise.
Moreover, Humana's stock price has been soaring since it
reported its first quarter results on May 1, resulting in a 12%
gain to date. Further, the company reported positive earnings
surprise in all the past four quarters, with an average beat of
Humana reported first-quarter 2013 net operating earnings of
$407 million or $2.69 per share. The results substantially
surpassed the Zacks Consensus Estimate of $1.78 as well as the
year-ago earnings of $248 million or $1.49 per share.
Revenues of Humana for the reported quarter climbed 2.6% year
over year to $10.49 billion, surpassing the Zacks Consensus
Estimate of $10.25 billion. Revenues from premium increased 1% year
over year to $9.87 billion, while services revenues surged 50% to
$525 million in the reported quarter.
The strong results also prompted Humana to raise its earnings
guidance for 2013 to $8.40-$8.60 per share from $7.60-$7.80. The
Zacks Consensus Estimate of $8.66 lies above the range,
representing a 23.8% year over year improvement.
Moreover, the valuation of Humana looks attractive. The shares
are trading at a discount to its peers both on a price-to-book and
on a forward price-to-earnings basis, while the return on equity of
15.9% is higher than the peer group average of 12.5%.The
year-to-date return from the stock is 21%, above S&P's return
Other health maintenance organizations worth considering are
Molina Healthcare Inc. ( MOH ) - Zacks Rank #1
(Strong Buy), Aetna Inc. ( AET ) - Zacks Rank #2
(Buy) and Health Net Inc. ( HNT ) - Zacks Rank #2
(Buy).AETNA INC-NEW (AET): Free Stock Analysis ReportHEALTH NET INC (HNT): Free Stock Analysis
ReportHUMANA INC NEW (HUM): Free Stock Analysis
ReportMOLINA HLTHCR (MOH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment