For Immediate Release
Chicago, IL – January 14, 2013 – Zacks Equity Research highlights Haemonetics (HAE) as the Bull of the Day and Iron Mountain ( IRM) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Aetna Inc. (AET), UnitedHealth Group Inc. (UNH) and CIGNA Corp. (CI).
Here is a synopsis of all five stocks:
2013 is considered a landmark year for Haemonetics (HAE) based on several key growth factors, including entry in the $1.2 billion whole blood collection market with the acquisition of the transfusion medicine business of Pall Corp. We are also optimistic about the expected limited market release of the paperless phlebotomy offering by the end of the fiscal fourth quarter.
We believe deeper penetration of IMPACT accounts and the growth in the Plasma business should drive sales going forward. Haemonetics focus on emerging markets is yielding results and China continues to record strong growth. Revenue from this region is expected to accelerate over the forthcoming period.
We thus upgrade the stock to Outperform. Our target price is based on 29.6x our 2013 EPS estimate of $1.69.
Iron Mountain (IRM) reported a dismal third quarter negatively impacted by lower-than-expected organic growth in the core services coupled with contraction in activity-based service revenue and decline in recycled paper prices. The company provided a tepid outlook.
Although the company's decision to convert into an REIT would definitely increase shareholders value and reduce the tax burden, we continue to believe that the results will be negatively affected by sluggish internal growth, volatile foreign exchange rates and a decline in recycled paper prices. Iron Mountain has a strong product portfolio, which is helping it to expand into international territories.
However, we believe that this will not be enough to drive significant growth over the long term. Thus, we have downgraded the stock from Neutral to Underperform and set a price target of $28.00.
Aetna Partners BTP, Forms ACO
U.S. health insurer Aetna Inc. (AET) has agreed to form an Accountable Care Organization (“ACO”) with Brown & Toland Physicians (“BTP”). This is in sync with the company’s effort to improve the safety and quality of patient care and make health care more affordable.
The newly formed ACO will serve Aetna’s members who are enrolled in preferred provider organization (“PPO”) and Managed Choice (“MC”) plan. It will also cover those who receive care from Brown & Toland primary care doctors.
Brown & Toland doctors will receive remuneration based on their performance in reducing patient health care costs while providing them best service.
An ACO is a collaboration of health care providers who voluntarily form alliances to provide coordinated high quality care to patients. An ACO is accountable for the quality, cost, and overall care offered to members. By focusing on the needs of patients and linking payments to outcomes, the model is intended to improve the health of individuals and communities and curb rising health care costs.
ACOs or collaborative accountable care is one of the several ways by which President Obama wants to improve the quality of health of all Americans. It is viewed as a tool that would deliver seamless, high quality care for the overall population.
The Health Care Reform called for such an arrangement in order to trim unnecessary expenses associated with the absence of coordination between multiple physicians and other providers. Most Americans with multiple chronic conditions receive care from multiple physicians, and it has been observed that few patients were not taken care of to the fullest extent possible by some physicians. A large percentage of the sick population ended up being victims of medical errors and faced hospital readmissions within days of their discharge. Thus, ACOs were formed to reduce the exorbitant amounts spent due to lack of managed care.
Other health insuring giants like UnitedHealth Group Inc. (UNH) and CIGNA Corp. (CI) are also aggressively forming ACOs. Going forward, we expect such patient-centered collaborations to rapidly grow in numbers.
Aetna currently retains a Zacks Rank #3 (Hold). We are also maintaining our long-term Neutral recommendation on the shares.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
More From Zacks.com