Hi White Shoes,
Recently you wrote
" Obviously if Hum keeps on doing well, the stock will EVENTUALLY have to appreciate because the amount of cash in their bank account will become impossible to ignore, and they will start acquiring more companies, which will also give them a larger
presence."
Just mho, but the cash is already impossible to ignore.
I think the question all the potential buyers are waiting to be answered is "What is HUM going to do with the ~$160M"
I suspect at the moment that it's invested in short term notes yielding ~4%. That is not a good return on equity. They can't go on accumulating money forever, they must put it to work.
I know they talk about future acquisitions, but who?.
Is it a good fit?
What return can they expect?
Over what time period?
When they make a deal, and give everybody the details, then the market will judge and react accordingly.
The recent spike to $70, was that caused by q4 results or was that rumours about the Andyne deal. Both these announcements came very close together and I'm speculating that it was the Andyne deal which caused the run up, just for the stock to come down again when it was discovered that this wasn't "THE BIG ONE" that we are waiting for.
Having said that people are waiting for info, I just bought some and am looking to buy more, because I think HUM will do the right deal.
HUM return on equity 21.78%
HUM current ratio 9.09 (implies co managed too conservatively)
Thoughts anyone?
Regards
Ray |
