Universal American Corp. (UAM)

UAM 
$8.55
*  
0.05
0.59%
Get UAM Alerts
*Delayed - data as of Aug. 29, 2014  -  Find a broker to begin trading UAM now
Exchange: NYSE
Industry: Health Care
Community Rating:
View:    UAM After Hours
 
 
Symbol List Views
FlashQuotes InfoQuotes
Stock Details
Summary Quote Real-Time Quote After Hours Quote Pre-market Quote Historical Quote Option Chain
CHARTS
Basic Chart Interactive Chart
COMPANY NEWS
Company Headlines Press Releases Market Stream
STOCK ANALYSIS
Analyst Research Guru Analysis Stock Report Competitors Stock Consultant Stock Comparison
FUNDAMENTALS
Call Transcripts Annual Report Income Statement Revenue/EPS SEC Filings Short Interest Dividend History
HOLDINGS
Ownership Summary Institutional Holdings Insiders
(SEC Form 4)
 Save stocks for next time

Universal American Corporation (UAM)

Goldman Sachs Healthcare Conference

June 12, 2013 6:20 p.m. ET

Executives

Richard Barasch – Chairman and CEO

Analysts

Matthew Borsch – Goldman Sachs

Presentation

Operator

Matthew Borsch

Okay. So we're getting the go-ahead signal.

All right. So welcome to another afternoon session here at the Goldman Sachs 34th Annual Healthcare Research Conference.

Before we get started I just need to read a brief disclosure. We're required to make certain disclosures in public appearances about Goldman Sachs' relationships with companies that we discuss. The disclosures relate to investment banking relationships, compensation received or 1% or more ownership. I'm prepared to read disclosures for any issuer now or at the end of this call if anyone would like me to.

However, these disclosures are available in our most recent reports available to you as clients on our firm portals. In addition, updates to those disclosures are available by ticker on the firm's public website at www.gs.com. In addition, disclosure is available to research with respect to issuers if any mentioned here and are available through your investment representative. Finally, as always, views of non-Goldman Sachs personnel may not represent the company views.

All right. With that let me welcome Richard Barasch who is CEO of Universal American. Been to our conference for a number of years now and we're delighted to have him back. I think the, you know, the Medicare Advantage will clearly be something that's a focus to us and to many investors so we'll talk about that. That is the main driver of the business.

But it's not the only driver. I want to, you know, make sure that we touch on a couple of other things which is the growing ACO business, although it's not quite the ACO business in the way that we think about it when we hear about it from other managed care companies, and it's certainly something interesting that merits more attention. As well as maybe we'll talk a little bit about stock valuation and how to think about the tangible equity the company has which is, you know, a much more substantial portion of the current stock price than is we're normally accustomed to for managed care companies.

Actually, why don't we start in reverse order? What the hell.

Richard Barasch

Okay.

Matthew Borsch

So here is my question. We think about tangible equity and that, you know, I guess it's around -- your stock is at $9, tangible equity is around $7. Is one way of thinking about that, say if you were just to fly back and say, okay, we're shutting everything down today, assuming that your run-out was neutral on the remaining business, that mean you get $7 of share-back from liquidation?

Richard Barasch

That's what that would mean.

Matthew Borsch

Okay.

Richard Barasch

There are some tax things in there that are complicated.

Matthew Borsch

Right.

Richard Barasch

But there are tax assets, but those are totally supportable. So we're -- so I think your calculation is correct.

Matthew Borsch

Correct. Now is it fair to think about some of that -- some of that is, and this isn't taking away from anything we just said because what we, you know, $7 is $7, but some of that we can sort of think of as almost property, plants and equipment because it goes with the current operations of the business and some of that is truly excess capital.

Richard Barasch

I mean if you want to take the analogy, if you shut down the business, it wouldn't need that capital.

Matthew Borsch

Right.

Richard Barasch

And the difference is, if you have a plant and you shut down the manufacturing, you still own the plant, and you better sell it, and if it's not worth anything [inaudible] it's money. So I think there's a difference there in a liquidation scenario.

Matthew Borsch

Sure.

Richard Barasch

But your point is correct, out of that pile of capital, a certain amount of that supports our business because of capital requirements necessary to support, you know, sort of any financial business, banks, trust companies, etcetera. So if you then use, you know, a calculation like [350], RBC, you know, we still have, you know, 350-odd-million of excess capital.

Matthew Borsch

And sorry because I don't [put] the numbers -- how would that equate to the $7? How much of the $7 would that be?

Richard Barasch

About a half.

Matthew Borsch

About half. Okay.

Richard Barasch

Give or take, yeah.

Matthew Borsch

Sure, sure. We can talk in broad ranges here. Okay. All right, fantastic. That's certainly a good point to --

Richard Barasch

Yeah, it's a good start.

Matthew Borsch

Right, right.

Richard Barasch

Having money is better than not having money.

Matthew Borsch

Well, actually let me ask on that, which is certainly from an investor standpoint, that just proves that. You at various times had been pretty proactive in return on capital to shareholders and done special dividends. Is that -- I don’t know whether you recently -- most recently talked to that question.

Richard Barasch

We did a special dividend in November.

Matthew Borsch

Right.

Richard Barasch

Six months ago. So it's a long time ago.

Matthew Borsch

That's aged.

Richard Barasch

It's ancient history last year, nobody thinks about it. But, you know, the broader answer to the question obviously, you know, without getting into specifics, is that in the past, five or six years we've used all the tools.

Matthew Borsch

Right.

Richard Barasch

We bought back stock, we paid dividends, we acquired a company, we sold a company. And, you know, I think again what makes us a little bit unique I think in public companies in general is our willingness and actually enthusiasm to generate cash back to our shareholders.

Read the rest of this transcript for free on seekingalpha.com