Looking for clues on whether the time is right to invest in health plan stocks? Prepare to be confused.
Item: Warren Buffett cut way back on his holdings in health plan stocks, selling 1.3 million shares of WellPoint (27% of his stake in the company) and 1.1 million shares of UnitedHealth (24% of his stake). Buffett still holds 3.5 million shares of WellPoint and 3.4 million shares of UnitedHealth.
Item: After stating five months ago that HMO stocks “are ruined,” Mad Money host Jim Cramer now likes WellPoint and Triple-S Management. According to TheStreet.com, “Cramer said if investors are willing to pay historical multiples for these names, they could see a 35% gain in the share price of WellPoint, while Triple-S could pop 57%.”
Item: Wall Street analyst Christine Arnold of Cowen rates Humana “underperform,” meaning she expects shares in the company to underperform the S&P 500 index. Carl McDonald of Oppenheimer rates Humana “outperform,” meaning he expects shares in the company to outperform the S&P 500 index. Justin Lake of UBS rates Humana “neutral.”
Here’s what we do know for sure. Health plan stocks are up about 16% year to date, according to a CRG tally of 13 issues. After that, your guess is as good as ours.
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