Whatever the reasons for the recent drop in managed care stocks, Oppenheimer analyst Carl McDonald notes, “The industry doesn’t hold very many of the bonds issued by Lehman, AIG, and Washington Mutual, or much Fannie or Freddie preferred stock.”
Writes McDonald: “In total, the publicly traded managed care plans hold about $271 million in Lehman debt, $150 million in AIG debt, $74 million in Washington Mutual debt, and $273 million in Fannie & Freddie preferred stock. The total investments in these financial institutions is not large, at just 0.8% of total cash and investments for the industry.”
McDonald estimates that WellPoint has the biggest exposure, “with about $80 million in debt from Lehman, $120 million from AIG, and $24 million from Washington Mutual. This is on top of WellPoint’s disclosure of $243 million in FNM and FRE preferred stock.” That’s about 2.4% of WellPoint’s total cash and investments, McDonald says.
Subscribe in RSS Reader
