For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Anthem (ANTM) ten years ago? It may not have been easy to hold on to ANTM for all that time, but if you did, how much would your investment be worth today?
Anthem's Business In-Depth
With that in mind, let's take a look at Anthem's main business drivers.
Based in Indianapolis, IN, and formed through the merger of Anthem Inc. and WellPoint Health Networks Inc. in Nov 2004, Anthem Inc. is one of the largest publicly traded managed care organizations in terms of membership. The company was previously named WellPoint Inc. (WLP).
Effective Dec 3, 2014, the corporate name was changed to Anthem, Inc. and began trading under the ticker “ANTM”.
The company is also an independent licensee of the Blue Cross Blue Shield Association (BCBSA). Anthem is the largest BCBS plan provider in the United States. As of Dec 31, 2020, it catered to 43 million medical members through its affiliated health plans.
The company serves customers across all 50 states in the United States through its subsidiaries, namely UniCare and CareMore. Anthem now operates through four reportable segments:
Government Business (62% of 2020 Revenues): The segment consists of the Medicaid and Medicare businesses, National Government Services, and the Federal Employee Program (“FEP”).
Commercial & Specialty Business (31%): The segment covers the Local Group, National Accounts, Individual and Specialty businesses.
IngenioRx (7%): The IngenioRx segment includes the company’s PBM business, which began its operations in the second quarter of 2019. IngenioRx markets and offers PBM services to fully-insured and self-funded Anthem health plan as well as external customers.
Other: This comprises the unallocated corporate expenses as well as some businesses, which are not covered by the other two segments as they do not meet the quantitative thresholds for an operating segment as defined by Financial Accounting Standards Board.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Anthem ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in May 2011 would be worth $4,967.76, or a 396.78% gain, as of May 12, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 209.38% and the price of gold went up 17.43% over the same time frame.
Analysts are forecasting more upside for ANTM too.
Anthem’s first-quarter earnings of $7.01 per share beat the Zacks Consensus Estimate by 2.2% and ations complement its inorganic growth profile and help it boost Medicare Advantage growth. Its increasing top line, driven by premium rate increase and higher membership, paves the way for growth. Its solid guidance impresses. It witnessed a rise in usage of its virtual care services. Several contract wins are expected to drive its membership. The company exited the first quarter with 43.5 million members. Its shares have outperformed its industry in a year. The company undertakes shareholder-friendly moves via buybacks and dividend payments. However, its high costs continue to weigh on its bottom line. Its weak balance sheet is a concern for the company.
Shares have gained 9.88% over the past four weeks and there have been 8 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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