Obama Pushes for Health Overhaul: President Obama is pushing for a broad overhaul of U.S. healthcare on a day in which the White House raised its forecast for the U.S. budget deficit for this year.
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Buy - Price 29.25 on April 28
by Hilliard Lyons

Humana's 1Q09 earnings rebounded strongly from a depressed level in the previous year [to] EPS of $1.22, versus 47 cents in 1Q08, and four cents ahead of expectations... .Medicare Advantage membership rose 16% from a year ago, to 1.47 million. HUM added 33,000 members in 1Q and another 13,600 in April, for 46,600 total, close to the 2009 target of 50,000. Revenue for the quarter rose 11%, to $7.71 billion, from $6.96 billion last year. We feel HUM has a valuable franchise in its Medicare business. The current political environment may not be as hospitable to private-sector plans; there could be pressure on reimbursement. We believe the stock reflects the situation. We have lowered our target to what we feel is a more reasonable 45. Market cap: $4.4 billion.

3 Stocks I Saw on TV: Dan Fitzpatrick examines three stocks viewed on Fast Money. Today's stocks Permian Basin Trust, Las Vegas Sands, Humana, Inc.

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He's waging war against the health maintenance organizations, the cost containers. He's changing the rules on Medicare in a way that Humana (HUM) or UnitedHealth (UNH) never thought was possible.

Buy - Price $37.93 on Feb. 2
by Hilliard Lyons

[This health-services and benefits provider reported] 4Q earnings in line with expectations. EPS of $1.03 declined from $1.43 in 4Q07...at the lower end of management's guidance of $1 to $1.10. Lower earnings from the standalone Medicare prescription-drug plan and seasonality were factors...Humana also had four cents a share in investment impairments in the quarter. Membership targets were largely achieved....Commercial revenue rose 10%, as acquisitions contributed. Government revenue increased 22%, as Medicare Advantage premiums grew 29%.... [Otherwise,] operations performed well. Market cap: $6.4 billion.

Health care

But there also could be some winners in health care. Cliggott thinks generic drug maker Teva Pharmaceutical Industries (TEVA) could benefit from any assault on drug pricing. And the CEO of managed-care company Humana (HUM), Michael McAllister, has said that his company can benefit by bringing technology systems and other efficiencies to the insurance market. Medco Health Solutions (MHS) and Express Scripts (ESRX) also could benefit, as each offers pharmacy-benefits services.

PE of 6, and a PEG of 0.50.

Louisville’s healthcare provider announced that its board increased the company’s buyback program to $250 million. This amount excludes the $92.8 million used during the last repurchase authorization of $150 million, which was initiated in February 2008. The repurchases can be made at any time as long as they are before the expiration date of December 31, 2009.

After Humana’s second quarter results beat everyone’s estimates, the stock jumped 6% in Monday trading. The company earned $209.9 million, or $1.24 a share, a slight drop from the year-ago period when Humana earned $216.8 million, or $1.28 a share. Humana was expecting $1.15 to $1.20 a share while Wall St. was anticipating $1.18 a share.

Revenue for the quarter was $7.35 billion compared to last year’s $6.43 billion. The company added that the better-than-expected results were due to surprise results in its Medicare Prescription Drug Plan.

Humana increased its full year forecast to $4.30 to $4.40 a share from its previous expectation of $4.10 to $4.35 a share. Analysts are expecting $4.23 a share

Humana also recently agreed to purchase Cariten from Knoxville, Tenn.-based Covenant Health for about $245 million in cash. The deal will close in the fourth quarter of this year.

Oppenheimer research has an outperform rating on the stock and was bullish on the company’s surprising second-quarter and the Cariten purchase. The Cariten acquisition could add over $0.10 to EPS next year and 2% to Humana’s earnings growth rate in 2009. The 12-18 month target is set at $76, offering huge upside potential.

Louisville’s healthcare provider announced that its board increased the company’s buyback program to $250 million. This amount excludes the $92.8 million used during the last repurchase authorization of $150 million, which was initiated in February 2008. The repurchases can be made at any time as long as they are before the expiration date of December 31, 2009.

After Humana’s second quarter results beat everyone’s estimates, the stock jumped 6% in Monday trading. The company earned $209.9 million, or $1.24 a share, a slight drop from the year-ago period when Humana earned $216.8 million, or $1.28 a share. Humana was expecting $1.15 to $1.20 a share while Wall St. was anticipating $1.18 a share.

Revenue for the quarter was $7.35 billion compared to last year’s $6.43 billion. The company added that the better-than-expected results were due to surprise results in its Medicare Prescription Drug Plan.

Humana increased its full year forecast to $4.30 to $4.40 a share from its previous expectation of $4.10 to $4.35 a share. Analysts are expecting $4.23 a share

Humana also recently agreed to purchase Cariten from Knoxville, Tenn.-based Covenant Health for about $245 million in cash. The deal will close in the fourth quarter of this year.

Oppenheimer research has an outperform rating on the stock and was bullish on the company’s surprising second-quarter and the Cariten purchase. The Cariten acquisition could add over $0.10 to EPS next year and 2% to Humana’s earnings growth rate in 2009. The 12-18 month target is set at $76, offering huge upside potential.

Weak economy is killing this one.