Prudential Securities Reports Insider Buying In Health Care Stocks Broadens Out
Business Wire - September 18, 1998 11:46
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NEW YORK--(BUSINESS WIRE)--Sept. 18, 1998--
Research Notes by Prudential Securities Analyst Frank Ponticello follow:
Insider Buying In Health Care Stocks Broadens Out/Research Notes
Subject: Health Care Stocks TECHNL; Analyst: Frank Ponticello
HMO stocks see Insiders Placing Some Big Bets On Their Companies
HMO corporate executives and directors have recently been supporting their bleeding stocks as insider open-market buying is broadening in this group. During the
past 6 months we have seen splintered insider consensus open-market buying activity but recently during the last couple of months insiders have been stepping up to
the plate assuming risk in buying their stocks in the open market via consensus. Currently we have 9 health care services stocks with recent insider consensus buying
and leading this mix with the largest number of shares purchased in the open market is Oxford Health Plans where insiders bought 2,015,000 shares, followed by
Medpartners- 484,850 shares, Horizon Health- 186,750 shares, Coventry Health Care - 90,600 shares, Foundation Health Systems - 56,700 shares, Matria
Healthcare - 37,550 shares, Pediatric Services of America- 36,600 shares, Sun Healthcare Group - 32,693 shares, and United Healthcare - 19,070 shares.
Some health care stocks appear to be bottoming but more technical work is probably needed
The health maintenance stocks have been in a bear market for the last few months and in some cases longer. In our current hyper cycle market these Stage 4 stocks
crashed and burned in a very expedient fashion and appear to be trying to trace out a bottom. It would be premature to say this is the bottom but recently contrary
to the market's volatility these stocks have stopped their descent and have started trading sideways developing small trading ranges. Our short term picture is a group
trying to firm but our intermediate picture suggests some backing and filling in a number of cases. I think the point here is that these stocks are down substantially and
in some cases are worth taking a lookout at as value players and bargain hunters are beginning to circle the wagons.
Healthcare Number of Net Dollar Trade Transaction
Services Stocks Insiders Shares Value Dates Prices
--------------- --------- ------ ------ ----- -----------
Medpartners
(MDM-2 7/8) 11 484,850 $ 1,396,368 8/10- 2.88-3.56
8/12/98
Coventry Health
(CVTY-6 7/8) 11 90,600 $ 503,736 7/15- 5.56-7.63
8/7/98
Matria HC.
(MATR-2 3/16) 5 37,550 $ 79,981 7/28- 2.13-3.50
9/9/98
Pediatric Svcs.
(PSAI-2 3/8) 5 36,600 $ 103,944 6/19- 2.84-3.53
8/21/98
Oxford H.P.
(OXHP-8 1/4) 4 2,015,000 $12,452,700 8/14- 6.18-7.68
9/8/98
Foundation
(FHS-10 3/4) 4 56,700 $ 669,627 8/20- 11.81-12.75
8/26/98
Horizon Health
(HORC-6 5/16) 3 186,750 $ 958,027 8/4- 5.13-6.63
9/1/98
Sun Healthcare
(SHG-9 11/16) 3 32,693 $ 290,313 8/28- 8.88-9.13
8/31/98
United HC.
(UNH- 39 5/8) 3 19,070 $ 613,863 8/12- 32.19-36.00
8/14/98
Technical Stage Rating:
Stage 1 -- The basing area or neutral trading range after the declining phase Stage 2 -- Advancing or trending phase Stage 3 -- Top or Consolidation Area Stage 4
-- Downtrend
Criteria For Consensus Insider Signal:
1. Three or more insiders buying a minimum of 1,000 or more shares in the open market with no simultaneous selling within a three-month time frame from first
open-market purchase.
2. Analyze only open-market purchases (no options-related purchases).
3. We are only interested in those corporate insiders who are involved in the operations or running of a company, not controlling shareholders (any person or party
owning 10% or more of the company's stock) who are neither officers nor directors (i.e., mutual fund companies or venture capitalists, etc.)
4. No stocks priced under $5 per share or under $50 million market cap.
Prudential Securities Incorporated (or one of its affiliates) or their officers, directors, analysts, or employees may have positions in securities or commodities referred
to herein, and may, as principal or agent, buy and sell such securities or commodities.
Prudential Securities Inc. makes a primary over-the-counter market in the shares of Coventry Health Care, Pediatric Services of America, and Oxford Health Plans.
The Prudential Equity Research Department rates Oxford Health Plans and Pediatric Services of American a Hold, and United Healthcare a Strong Buy. The other
companies mentioned are not fundamentally followed by the Prudential Equity Research Department.
Prudential Securities Inc. acts as a specialist that makes a market in the Security of United Healthcare Corp. At any given time, the specialist may have a position
either long or short, in the United Healthcare Corp., and as a result of the associated specialist's function as a market maker, such specialist may be on the opposite
side of orders executed on the floor of a national securities exchange.
All stocks priced as of close, Sept. 17, 1998.
sorry, don't follow it but found this story on it. SR |
