Humana (HUM): Today's Featured Health Care Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Humana ( HUM) pushed the Health Care sector lower today making it today's featured Health Care laggard. The sector as a whole closed the day up 0.6%. By the end of trading, Humana fell $2.04 (-2.8%) to $70.61 on heavy volume. Throughout the day, 3.8 million shares of Humana exchanged hands as compared to its average daily volume of 2.1 million shares. The stock ranged in price between $70.27-$72.94 after having opened the day at $72.64 as compared to the previous trading day's close of $72.65. Other companies within the Health Care sector that declined today were: Oxygen Biotherapeutics ( OXBT), down 33%, CombiMatrix Corporation ( CBMX), down 21.9%, EnteroMedics ( ETRM), down 19.6%, and Merit Medical Systems ( MMSI), down 15.2%.
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Humana Inc. operates as a health care company that offers a range of insurance products and health and wellness services that incorporate an integrated approach to lifelong well-being. Humana has a market cap of $11.49 billion and is part of the health services industry. The company has a P/E ratio of 9.7, below the S&P 500 P/E ratio of 17.7. Shares are up 5.8% year to date as of the close of trading on Thursday. Currently there are 15 analysts that rate Humana a buy, no analysts rate it a sell, and six rate it a hold.

TheStreet Ratings rates Humana as a buy. 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 notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, USMD Holdings ( USMD), up 18.9%, Edap TMS ( EDAP), up 18.3%, pSivida ( PSDV), up 18.3%, and Onyx Pharmaceuticals ( ONXX), up 12%, were all gainers within the health care sector with Gilead ( GILD) being today's featured health care sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the health care sector could consider Health Care Select Sector SPDR ( XLV) while those bearish on the health care sector could consider ProShares Ultra Short Health Care ( RXD).

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