NEW YORK (TheStreet) -- Humana (HUM) hit a one-year high of $112.78 as of 12:48 p.m. EST on Monday afternoon after the proposed government cuts to the Medicare Advantage program were less than expected.
The Louisville-based company is the second-largest Medicare Advantage insurer, and the company led insurance stocks higher on Monday as it surged. The federal government announced on Friday that health insurers that run Medicare Advantage, the private version of the government's program, would deal with a base payment cut of approximately 3.55% next year. Humana estimated on Monday that the reduction would total 3.5% to 4%, down from its previous estimate of 6% to 7%, according to Bloomberg.
The proposed cuts are subject to negotiations and would not become final until April 7.
TheStreet Ratings team rates HUMANA INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HUMANA INC (HUM) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."