Molina (MOH) to Join S&P 500 Driven by Medicare Performance
Molina Healthcare, Inc. MOH is set to join the broader market index, S&P 500, effective Mar 2, before the opening bell. The managed healthcare services provider is growing at an impressive pace. As of Dec 31, 2021, the company served around 5.2 million members through locally-operated health plans across several markets, reflecting a 29% year-over-year increase.
MOH started 2020 with nearly $8 billion in market capitalization, which has surged to $18.6 billion in recent times. The significant growth is primarily due to strong Medicare and Medicaid performance and increased membership. Also, the inorganic growth trend is fuelling its growth engine. The company has been gaining from the restructuring and profitability improvement plan.
Molina Healthcare is expected to leave S&P MidCap 400 and replace IHS Markit Ltd. in the S&P 500 Index, said S&P Dow Jones Indices, a division of S&P Global Inc. SPGI. IHS Markit is being acquired by S&P Global. The deal is expected to close on Feb 28.
The addition of Molina Healthcare to the coveted S&P 500 Index is expected to boost its shares, which have exhibited a strong uptrend in the past year. MOH shares have jumped 43.2% in the past year, outperforming the 38.1% increase of the industry.
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The company’s growth potential was highlighted during fourth-quarter earnings, which beat estimates on the back of increased membership and premiums. Molina Healthcare expects its 2022 business to witness reduced impacts from COVID. Robust Medicare and Medicaid performance will buoy results. Premium revenues for 2022 are projected to be $28.5 billion, indicating a rise from the 2021 level of $26.9 billion. Adjusted earnings per share for 2022 are expected at $17, implying growth from $13.54 in 2021.
Zacks Rank & Key Picks
Molina Healthcare currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the Medical space include The Joint Corp. JYNT and Apyx Medical Corporation APYX, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Joint develops chiropractic clinics in the United States. The medical care facility provider’s bottom line for 2022 is expected to jump 60.6% from the year-ago figure. Scottsdale, AZ-based The Joint has witnessed one upward estimate revision in the past 30 days and no movement in the opposite direction. The Joint beat earnings estimates thrice in the last four quarters and missed once, with the average surprise being 207.7%.
Apyx Medical is a manufacturer of medical devices for cosmetic and surgical markets around the world. Based in Clearwater, FL, APYX’s bottom line for 2022 is expected to rise 17% year over year. It has witnessed one upward estimate revision in the past 60 days and no movement in the opposite direction. Apyx Medical beat earnings estimates thrice in the last four quarters and met once, with the average surprise being 25.9%.
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