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Stock Market & Financial Investment News

News Breaks
July 25, 2014
12:11 EDTUNH, WLP, CI, WCG, AETWellCare profit warning sinks managed care names
A number of managed care names are falling after one of the companies in the sector, WellCare (WCG), preannounced significantly weaker than expected results. UBS, however, recommends using the weakness in the sector as a buying opportunity. WHAT'S NEW: WellCare, which specializes in managing Medicaid and Medicare plans, preannounced a second quarter per share loss of 7c, excluding certain items. Analysts on average expected the company to report a per share profit of 90c. The company's revenue came in slightly above expectations. WellCare cut its full-year earnings per share guidance to $2.20-$2.50 from $4.40-$4.75. The company said recipients of a new Medicaid program in Florida utilized more medical services than expected since the company began administering the program in May. Additionally, the company took an impairment charge related to an acquisition and it had an unfavorable reserve development. ANALYST REACTION: The factors cited by WellCare for the cut in its guidance appear to be specific to that company, UBS analyst A.J. Rice wrote. Meanwhile, data from other companies that administer Medicaid plans indicate that the increased utilization costs in that state are also specific to WellCare, Rice contended. For example, Centene (CNC) reported Q2 results earlier this week and indicated that utilization trends for newly covered beneficiaries in Florida was largely in line with expectations, while UnitedHealth (UNH) said its Medicaid business had performed well last quarter, the analyst stated. Additionally, WellCare said that its higher than expected medical utilization costs had been caused primarily by drug costs that exceeded its forecast, Rice stated. Since drug costs tend to be known relatively quickly, United Health and Centene would have divulged any issues with drug costs in conjunction with their Q2 results, Rice said. The analyst recommended that investors buy Aetna (AET), Cigna (CI), United Health and WellPoint (WLP) on any weakness today. PRICE ACTION: In late morning trading, Aetna fell 1.5% to $83, Cigna lost 1% to $95.50, UnitedHealth lost 1% to $84.50, WellPoint slid 1.5% to $113.50 and Centene tumbled 7% to $74 while WellCare plunged 19% to $62.
News For AET;CI;UNH;WCG;WLP From The Last 14 Days
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May 26, 2015
16:42 EDTAETAetna Chief Accounting Officer to depart July 3, AES's Sharon Virag to succeed
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08:53 EDTUNHCastlight Health working to offer services to UnitedHealth customers
In a regulatory filing after Friday's close, Castlight (CSTL) disclosed that the company and United HealthCare Services (UNH), on behalf of itself and its affiliated companies, have agreed upon a process for how Castlight can obtain a customerís plan information from United HealthCare to allow Castlight to provide its services to that customer. "Castlight has begun to build the technology infrastructure to support this process and does not believe that this development will materially impact its financial results in 2015," the company stated.
May 22, 2015
12:39 EDTCICigna May June volatility elevated
Cigna June call option implied volatility is at 29, July is at 26, October is at 27; compared to its 52 week range of 16 to 31, suggesting large near term price movement.
May 20, 2015
07:42 EDTAETAetna removed from US Focus List at Credit Suisse
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May 19, 2015
12:04 EDTAET, CIAnthem CFO says 'good time' for 'meaningful' acquisition, Reuters reports
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May 18, 2015
09:33 EDTAETAetna repeats FY15 operating EPS view $7.20-$7.40, consensus $7.38
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May 15, 2015
16:51 EDTAETGreenlight Capital gives quarterly update on stakes
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07:32 EDTWCGWellCare valuation compelling after selloff, says Leerink
Leerink views the valuation of WellCare shares as compelling following the company's "solid" Q1 results. The firm reiterates an Outperform rating on the stock with a $105 price target.

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