Humana Dips on Q1 Report

Posted Apr 26th 2010 5:00PM by Steven Mallas
Filed under: Earnings Reports, Aetna Inc (AET), CIGNA Corp (CI)

Humana Inc. (HUM), whose colleagues include Aetna Inc. (AET) and CIGNA Corporation (CI), reported Q1 earnings earlier today. The health insurer isn't doing so well, unfortunately. In late trading, shares were down almost 3% to $43.73. Volume is above the norm, as you might expect.

I've covered many stocks that are near their 52-week highs, but this one doesn't fall into such a desirable category. Alas, the 52-week high on the shares stands at $52.66. And, as you can see from the following one-year chart, the stock began its pullback after it topped out in January. Since then, things haven't been too exciting.

According to Reuters, the company booked an adjusted profit of $1.19 per share. Analysts predicted net income of around $1.14 per share. That's a pretty good performance.

But is it good enough to make me want to start a trading position? Probably not.

Humana could move sideways for a while. Hard to tell, but I just don't like today's dull price action. And, as the Reuters piece reminds us, the landscape of health insurance is changing. This adds uncertainty and risk to the situation, in my opinion. It makes me want to simply stay away and search for alternative ideas. Why should I try to predict how the institutions are going to react to the ongoing evolution of the industry?

Of course, you could get a bounce from the stock in the next few days, but my preference would be to wait for a further decline before giving serious consideration to sending in a buy order.

Disclosure: I don't own any company mentioned; positions can change without notice.

Tags: AET, aetna, CI, cigna, HUM, humana, insurance, inthenews