As part of our ongoing series here at The Acquirer’s Multiple, we provide this feature article titled ‘Stock in Focus‘ where we focus on one of the stocks from our Stock Screeners.
One of the cheapest stocks in our Stock Screeners is Humana Inc (NYSE: HUM).
Humana is one of the largest private health insurers in the U.S. with a focus on administering Medicare Advantage plans. The firm has built a niche specializing in government-sponsored programs, with nearly all its medical membership stemming from individual and group Medicare Advantage, Medicaid, and the military’s Tricare program. The firm is also a leader in stand-alone prescription drug plans for seniors enrolled in traditional fee-for-service Medicare. Humana offers employer-based plans primarily for small businesses along with specialty insurance offerings such as dental, vision, and life. Beyond medical insurance, the company provides other healthcare services, including primary-care services and pharmacy benefit management.
A quick look at the share price history for Humana (below) over the past twelve months shows that the price is up 12%. Here’s why the company is undervalued.
Market Cap: $54.3 Billion
Enterprise Value: $54.1 Billion
Operating Earnings: $5.9 Billion
Acquirer’s Multiple: 9.15
Free Cash Flow (TTM)
Free Cash Flow: $4.97 Billion
FCF/EV Yield: 9%
Piotroski F-Score: 9
Beneish M-Score: -2.37
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