On May 22, shares of Health Net, Inc. HNT scaled a new 52-week high of $61.97 on a couple of positive developments at the company. These are collaboration with Centura Health and strong first-quarter 2015 earnings.
Health Net’s one-year return of 53.10% was significantly higher than the S&P 500’s return of 11.86%. It was also above that of the other industry players like Humana Inc. HUM, UnitedHealth Group Incorporated UNH and Anthem Inc. ANTM that recorded returns of 43.82%, 51.82% and 50.88%, respectively.
Earlier this month, Health Net reported strong first-quarter 2015 earnings that surpassed the Zacks Consensus Estimate and also improved year over year. The upside was driven by higher memberships, modest health care costs, and lower Western Region general and administrative (G&A) expenses. The top line also showed year-over-year improvement on higher health plan services premiums, rise in Government Contracts revenues as well as an increase in net investment income.
Moreover, a strong financial position prompted the company to engage in share repurchases that should boost investor confidence, going ahead. Additionally, management remained upbeat about the company’s performance in 2015 and thus raised its earnings guidance and reiterated the revenue and expense ratio outlook.
Last month, Health Net collaborated with Centura Health, one of the leading health care providers in Colorado and Western Kansas to help increase veterans’ access to convenient and superior quality care. Health Net Federal Services has been providing superior managed health care programs to government agencies, including the U.S. Department of Defense (DoD) and Veterans Affairs (VA) at affordable prices for quite some time. This deal strengthens Health Net’s existing relationship with VA.
Health Net currently holds a Zacks Rank #2 (Buy).
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