If You Invested $1000 in Molina a Decade Ago, This is How Much It'd Be Worth Now
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Molina (MOH) ten years ago? It may not have been easy to hold on to MOH for all that time, but if you did, how much would your investment be worth today?
Molina's Business In-Depth
With that in mind, let's take a look at Molina's main business drivers.
Founded in 1980 and headquartered in Long Beach, CA, Molina Healthcare Inc. is a multi-state managed care organization participating exclusively in government-sponsored healthcare programs such as the Medicaid program and the State Children's Health Insurance Program (SCHIP), catering to low-income persons. It is a FORTUNE 500 company.
The company provides managed healthcare services under the Medicaid and Medicare programs, and through the state insurance marketplaces (the Marketplace). Strong Medicare and Medicaid performance will buoy results.
Molina Healthcare was formerly known as American Family Care Inc. until it changed its name in Mar 2000. The company currently operates in two segments: Health Plans and Other. The company manages most of its operations through the Health Plans segment.
The Other segment mainly includes the results of the Pathways behavioral health unit, which Molina sold in the fourth quarter of 2018 apart from other corporate amounts not allocated to the segment.
As of Dec 31, 2022, the company served around 5.3 million members through its locally-operated health plans across several markets, indicating a 1.1% year-over-year increase. This is reflective of an improving business scenario.
The health plans are locally operated by wholly owned subsidiaries of Molina, each of which is licensed as a health maintenance organization, or HMO. Molina Healthcare derives revenues primarily from premiums paid to its health plans by the relevant state Medicaid authority. The premium revenues are jointly financed by the federal government and the states.
The company also derives revenues from the federal Centers for Medicare and Medicaid Services (CMS) in connection with its Medicare services.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Molina a decade ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in October 2013 would be worth $9,600, or a gain of 860%, as of October 10, 2023, according to our calculations. This return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 161.75% and the price of gold went up 37.04% over the same time frame.
Analysts are anticipating more upside for MOH.
Molina Healthcare is poised for growth on the back of improving top-line and margin recovery. We expect the top line to grow 3.5% year over year in 2023. The company's enterprise-wide restructuring program to improve operational efficiency is providing impressive results. Its solid 2023 guidance instills investors’ confidence. Adjusted EPS for 2023 is expected to be a minimum of $20.75, which suggests 16% growth from the 2022 figure. New contract wins continue to buoy results. Its balance sheet strength and adequate cash-generating abilities are impressive. MOH's shares have outperformed its industry in the past year. However, a high MCR ratio indicates a smaller amount of premium left over after paying insurance claims. We expect membership to fall 2.8% year over year as of Dec 31, 2023. As such, the stock warrants a cautious stance.
Over the past four weeks, shares have rallied 5.11%, and there have been 2 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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