The life and health insurance company is climbing higher on Monday, gaining 5.6% to $83.82 by midafternoon. Trading volume of 4.3 million exceeded its three-month daily average of 2.4 million.
TheStreet Ratings Team has this to say about their recommendation:
"We rate CIGNA CORP (CI) a BUY. This is driven by several positive factors, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- CIGNA CORP's earnings per share declined by 8.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CIGNA CORP reported lower earnings of $5.20 versus $5.61 in the prior year. This year, the market expects an improvement in earnings ($7.16 versus $5.20).
- You can view the full analysis from the report here: CI Ratings Report
Must Read: Warren Buffett's 10 Favorite Stocks