Why Humana (HUM) Stock Is Climbing Today

NEW YORK (TheStreet) -- Shares of Humana Inc. (HUM) are higher by 2.73% to $131.14 in mid-morning trading on Tuesday, after the company announced a $2 billion share repurchase program, which will replace its previous $1 billion share repurchase program.

The $2 billion program has an expiration date of Dec. 31, 2016.

The health care company said it may repurchase shares from time to time at prevailing prices in the open market, by block purchases, or in privately negotiated transactions.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Separately, 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 some important positives, 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."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, HUM's share price has jumped by 32.08%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HUM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 20.4%. Since the same quarter one year prior, revenues rose by 18.4%. 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.
  • HUM's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
  • HUMANA INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HUMANA INC increased its bottom line by earning $7.70 versus $7.46 in the prior year. This year, the market expects an improvement in earnings ($7.75 versus $7.70).
  • You can view the full analysis from the report here: HUM Ratings Report

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