To: jeffbas who wrote (7771 ) 7/15/1999 6:59:00 PM From: Michael Burry Read Replies (1) | Respond to
Well, I went and bought it, got 63 1/8. I don't really care one way or another about a few points. Even 3 is just over 5%. I did a comparison of 8 different HMOs and came up with Pacificare as the best one as a value investment. Trigon and Wellpoint also scored well, but Pacificare was the best value (with one of the worst charts). Pacificare is more Medicare-dependent than most. I especially like that it is solidly profitable and firmly in control of its ratios despite a huge commercial exposure to California. I first bought and sold Pacificare in 1992. I traded it from about 48 to 72 a year or two ago. Looks like another good entry to me. And they have emerged as a leader. BTW, I like the HMOs as an investment better than the hospitals, practice management groups, and even practices. The insurers are the ones most firmly in control of their numbers in a difficult environment. I think their information advantage over just about everyone will stead them well. And reading through Pacificare's 10K tells me they are one of the best at keeping dibs on their stats. Management has already said both the gov't and commercial ratios will be stable over the next year. The commercial ratio is getting below 1995's level. A lot of insurers just keep seeing that number rise.
