be fair. just a short time ago you were talking
about this be fairly valued at $5-6. the market is
clearly looking ahead to better times. no maybe not
overnight, but given this week's "news," and the market's
reaction, i think we can say we've seen the lows and the
downtrend began at 30ish is over.
don't think you
views were ever that "off," as i've said before, but i
think it's fair to acknowledge that the "trend" is
changing for hum. fair?
to occur until the second half of the year at the
earliest.HUM has taken steps aimed at boosting short-term
profits even at the risk of losing enrollment.They are
clearly positioning the company for sale and seem to
believe the stock should be trading around $18 or so.I
guess the question is can they achieve enough
improvement in short-term earnings to get the stock back up
to the $10 to $14 range and then get a 40 to 50
percent premium on top of that.That would put a HUM
buyout anywhere from $15 to $21 per share.They face an
uphill battle because their P/E ratio is already fairly
high relative to the other HMO stocks and medical
costs are rising fast throughout the industry.I expect
them to get an upgrade by a brokerage firm to help
boost the stock price prior to any sale.This could
easily be a an 18 month time frame.
o.t. we continue to think alike. in wmi at an
average of 15 3/4. just added more wm at 23 7/8
yesterday, though i acknowledge that since it's hitting new
lows, it could go lower (remember cd, i though 9 was an
unbelievable bargain, come to think of it it was!) will lokk
forward to your commentary after reading. take
Can you tell me about Thompson and how it tells
about instituional buys? I also own
SRV as a bottom
fish along with NCSS and RAD.
Any thoughts on these
(and HUM my largest postion) are welcome. I do not
receive VL nodays but subcribed back in the old paper
days of the the '80 and made money on their 4's.
There was considerable buying interest
Humana stock today by the institutions.
My data comes
from Thompson I watch which
showed Super buy
all day long. I personally watched
buy orders all day long on my level 11
just received the latest
Value Line Survey review
yesterday. I plan to review it
and I will post my thoughts tomorrow.
I did notice
the stock had moved up
a notch to 4 or below
next year from a 5 with was
previous ranking and the worst
performance rank they
I was out this a few hours this
could not believe the
carnage in the markets! Zim, I
been bottom fishing in Xerox,Lockheed
Washington Mutual. I am looking
buying shares of Service Corp also.
Value Line has
just put it into the
long term recommended
like they might get some
(death) after today's drop in the
market. HA. I'll let
what Value Line says tomorrow!
goodwill are the intangibles which show up in the
book value....if you buy a restaurant for 500k that
has real estate worth 100k, equipment worth 100k &
inventory worth 100k, you paid 200k more than the
"component value". from an accounting standpoint, the extra
200k is known as good will, its the value of the
reputation of the restaurant, secrect recipies, etc...the
non-tangible items that you pay for.
as other posters
have stated, writing down Goodwill can sometimes be a
pre-requisite to selling your company...
i'm not an
accountant, but goodwill gets depreciated (i think) which can
be helpful, but it also goes against your
assests...if you have lots of goodwill on the books, it will
lower your ROA - a critical evaluation tool for mature
businesses. if i'm buying HUM, i don't want inflated goodwill
on the books to dilute my ROA....
goodwill in this case may mean that HUM is giving
up the investment income that the assets of the
insurance company was generating and/or perhaps having to
pay the tax liabilities that would otherwise be
deferred that these companies sometimes have.
wants the money now eventhough this work comp entity
has been contributing a significant percentage of
HUM's earnings over the last few quarters from reserve
takedowns - very unlike the sit with the CA HMOs.
Here is a piece:
trial lawyers don't really care that these "novel legal
theories" are unlikely to hold up in court. In September,
Maio v. Aetna, the RICO suit that was hoped would be a
model run, was dismissed by a federal district judge in
Pennsylvania. The suit alleged that all six million or so
people currently receiving their medical treatment from
Aetna were the victims of a vast fraud. Writing in the
dismissal, Judge John Fullam remarked that the "vague
allegation that 'quality of care' may suffer in the future
is too hypothetical an injury to confer standing
With the other RICO suits in
the mill, the trial lawyers are doing their best to
use the court of public opinion and the threat of
complete financial meltdown to get the HMOs to settle.
Since October, trial lawyers have sought to create a
market selloff of managed care stocks in order to force
Mr. Scruggs has been on the
front lines of the stratagem--cozying up to analysts at
Morgan Stanley and Prudential, as well as popping up on
conference calls for institutional investors to educate them
about the potentially dire outcome of the lawsuits. "If
HMO investors were smart," he said recently, "they'd
lean on their companies to see if we can work
something out." Since the suits were announced, most of the
managed care stocks have slumped to half their 1999
PAX did a lot of these write downs before
announcing the sale to NBC.
The move looks to be
cleaning off some more of the rotten "cheese". Evaluating
goodwill means they paid too much for a past
I've been playing with the SmartMoney Market map.
Food, Health Care, Utilities are all down sectors by at
least 40% since 990101. So I've been bottom fishing for
some three baggers.
The rules have changed so
much in Utilities I'm confused so I'm staying
I can't see loosing money on HUM, RAD, or KR as the
cycle swings this year. So I'm jumping in.
with you, zimmer and other Longs that investing
in Humana at this price is a golden opportunity
probably to double your money in 2000.
news today was misinterpreted by small investors who
sold whilst smart money was picking up shares on the
cheap: the daily chart shows the volume on the upside
was 2 or 3 times at least that on the downside.
Already institutions own more than 80% of HUM
I have also bought RAD near 11$ and will buy more
if the price remains below 12$. KR is probably a
share I should be buying too.
Just making themselves more appealing to another
HMO. Dumping Casualty and Property business (as CI
did) -- selling off worker comp -- taking big charge
that will make them more of an earnings boost for an
acquirer (example: think about what the businesses Tyco
bought recently did). Might it happen even sooner than
the 3rd qtr?