IBD Stock Of The Day Hails From Same Group For 3rd Day: Humana Stock Flashes Buy Signals

Humana

Humana

HUM

$7.58



1.66%



0%

IBD Stock Analysis

• Moving toward 475.54 buy point from long consolidation
• Cleared early entry at 461.97 and testing 469.44 entry
• Rival health insurer stocks also flashing buy signals

Composite Rating

Industry Group Ranking

Emerging Pattern

Consolidation

* Not real-time data. All data shown was captured at
3:35PM EDT on
06/27/2022.

Humana (HUM) is the IBD Stock Of The Day, with HUM stock clearing at least one early buy point Monday and flirting with another. Medical stocks are the leading sector in the current market rally, and health insurers are a leading group.

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In fact, Monday is the third straight IBD Stock Of The Day to feature a health insurer. Thursday’s Stock Of The Day, UnitedHealth Group (UNH), cleared an official buy point Monday intraday. Centene (CNC), Friday’s Stock Of The Day, cleared an early entry on Monday.

On Jan. 6, HUM stock crashed 19% after the insurer slashed expected growth for its Medicare Advantage membership for 2022, citing changes in competition. That prompted Humana to invest $1 billion in growing its Medicare Advantage business.

UnitedHealth hasn’t had the same retention issues and says its Medicare Advantage business is in-line with expectations.

But Humana has been rebounding. In April, it sold 60% of its home hospice businesses to private equity firm Clayton, Dubilier & Rice for $2.8 billion. In May, Humana established a second joint venture with Welsh, Carson, Anderson & Stowe to develop 100 senior-focused primary care clinics. The venture will invest $1.2 billion in the Medicare clinics, which will start operating between 2023 and 2025. It follows an $800 million venture to open 67 clinics by early next year. 

Humana reported in late April that first-quarter earnings rose 5% due to solid performance from its pharmacy business and lower administrative costs. Revenue rose 16% to $24 billion. The company raised full-year estimates. Analysts expect double-digit earnings growth in 2022 and 2023. Humana has a three-year EPS growth rate of 4%. 

HUM Stock Analysis

Shares rose 1.7% to 464.39 in Monday’s stock market trading. HUM stock moved above a downward-sloping trendline and cleared an early buy point at 461.97. It also briefly cleared a 469.44 entry as well. Humana stock has hit resistance several times around the 469-472 area.

Humana stock is in a consolidation going back to May 2021 with an official buy point of 475.54.

The relative strength line is at a two-year high, reflecting the stock’s outperformance vs. the S&P 500 index throughout 2022.

HUM stock has a stellar 96 IBD Composite Rating out of a possible 99. It’s ranked first among its peers in IBD’s managed care industry group.

UNH Stock, CNC Stock Buy Signals

Health care stocks have performed well as plays against inflation and recession-resistant options in the market. 

UNH stock rose 2% to 505.66, reclaiming its 50-day line after surging 9.6% last week. Intraday, shares briefly topped a 507.35 buy point for its double-bottom base. UnitedHealth stock has a 93 Composite Rating.

UNH stock is on IBD Leaderboard.

CNC stock was up nearly 2% Monday, to 84.57, closing in on an 87.44 double-bottom buy point. It’s already flashing an early buy signal from a downward-sloping trendline

Centene stock jumped 8.7% last week.

CNC stock has a 96 Composite Rating and a 93 EPS Rating.

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