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Healthcare Plan Sector: Bumpy Ride for UAM

September 22, 2013 | About:
Sally Jones

Sally Jones

49 followers
With the controversial Obamacare mandate on everyone’s mind, here’s an in-depth look at Universal American Corp. (UAM), the only company in the healthcare plan sector on a 52-week low. Twelve companies are in the sector, with a low ratio of 0.08.

Universal American Corp. is a relatively new company, incorporated in 2010, competing with numerous other health insurance companies, including giants UnitedHealth Group Inc. (UNH), Humana (HUM) and Cigna Corp. (CI).

Universal American Corp. reported financial results for the quarter ended June 30, 2013, with revenue of $534 million and a net loss of $91.8 million, or $1.05 per share. The company reported around $1.1 billion in revenue for the first half of 2013.

According to Richard A. Barasch, chairman and CEO of Universal American Corp, it was a difficult quarter for the company. He commented, “…Clearly we saw unexpected pressure on our Medicare Advantage results but our core HMOs performed well and we are taking the appropriate steps to improve our results in the other parts of our Medicare Advantage business... Taking a write down of the goodwill associated with APS Healthcare is a recognition that the deal has not worked out the way we had expected. Nevertheless, we remain excited about Medicaid and we are making considerable progress on both the risk and the fee for service businesses.”

Universal American’s second quarter balance sheet shows total assets were $2.4 billion, with cash and investments at $1.2 billion. As of June 30, 2013, UAM’s $1.2 billion portfolio was 24% was invested in U.S. government and agency securities.

Four billionaires are holding this stock, as of the second quarter of 2013.

Universal American Corp. (UAM)

Down 4% over 12 months, Universal American Corp. has a market cap of $644.17 million. The current share price is around $8.00, which is 28.1% off its 52-week high of $11.13. Shares trade with a P/E ratio of 15.80 and a P/B ratio of 0.70.

Incorporated in 2010, Universal American Corp., through its health insurance and managed care subsidiaries, primarily serves the growing Medicare population by providing Medicare Advantage and Medicare supplement insurance products. Approximately 25% of the over 65-year-old population in the United States is currently enrolled in Medicare Advantage plans. The company is poised to capture the opportunity to address the high cost of health care for the remaining 75% of the Medicare population enrolled in traditional fee-for-service Medicare and has joined with primary-care provider groups in several applications to participate in the Medicare Shared Savings Program through accountable care organizations. UAM’s operating segments include senior managed care, traditional insurance, and corporate and other.

Guru Action: As of June 30, 2013, four guru stakeholders hold UAM. There is no recent insider trading to report.

As of June 30, 2013, Richard Perry is the top Guru stakeholder with 7,702,936 shares of 9.57% of shares outstanding after he increased his position by 0.06%. Perry bought 4,504 shares at an average price of $9.07 for an 11.8% loss. This holding represents 1.8% of his total managed assets.

Diamond Hill Capital made a new buy in the second quarter of 253,570 shares at an average price of $9.07 per share for a loss of 11.8%.

Jim Simons increased his position by 147.52% when he bought 42,206 shares at an average price of $9.07 per share, taking a loss of 11.8%.

Track share pricing, revenue and net income:

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 2.5/5 (4 votes)

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