NEW YORK (TheStreet) -- Humana
(HUM - Get Report) shares are tanking, down -6.3% to $119.45, on Wednesday after reporting a 16.7% drop in second quarter profits to $2.19 per diluted share this year, which is in line with analysts estimates, from the $2.63 per share it made in the year ago period.
The company said the drop in profits was due to its investments in the healthcare exchanges created by the Affordable Care Act as well as the cost of Gilead Sciences (GILD - Get Report) controversial breakthrough Hepatitis C treatment Sovaldi.
Revenue for the quarter rose 18.4% to $12.2 billion, ahead of analysts analysts estimates of $12 billion.
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TheStreet Ratings team rates HUMANA INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:"We rate HUMANA INC (HUM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
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