HMO's are here and are here to stay for some time. In NY state there practically is no alternative and the vast majority must choose hmo's. many areas in the country are also almost totaly hmo's and the rest will follow. Those who have already gone hmo have no way back, the costs of any alternatives are unaffordable.
Yes hmo's still have to be perfected and they will.
The above article in the economist is very short sighted. Aetna has realized and is correcting and will be billing accordingly. As for this quarter. yes, they have underbilled and BTW AET is stilll expecting $1 NET PROFIT for this supposedly bad quarter, what will they earn when this is all cleared up $2 per quarter or higher. Aet has gone from $118 to $78 down over $42 or 1/3 its value, much too much oversold on a minor drop of 20-30 cents for a quarter, and expecting to be back on target in the next quarters.
Furthermore, in light of the above article (I am no big fan of the economist and do not regard them as any major financial publication) you must conclude that COMPETITION in the hmo business will become smaller, with the players that are now in arena capturing most of the market.
Aet has announced a 7.5 mil. share buyback, aside a 4.5 million buyback completed, which will leave only 140 mil. shares outstanding.
ROUGHLY 15 MILLION SHARES TRADED AT THESE LEVELS. with the volume trickling down and most of the sellers gone, this stock has to rebound. It seems it is one of the best plays in the healthcare sector at this bargain basement prices.
With an $82 book value, and billions in cash, (with fewer competitors entering the market, as mentioned above), this is a SOLID BLUE CHIP COMPANY, WITH HUGE POTENTIAL.
Again I see $77 the bottom and see no reason why we will not hit $90 very soon.
Sit tight hold on to your shares, they will be worth much more in no time.
P.S. If the hmo industry should consolidate further, there always is that glamor and magic word TAKEOVER candidate to this stock. AET has
a consideable low number of shares, trading below its $82 book value,
is projected to have $6 per share net earning or close to ONE BILLION
DOLLARS per per year. it has all the merits that a takeover candidate needs to have. |
