Molina Healthcare (MOH) Stock Declines After Pricing of Secondary Offering

NEW YORK (TheStreet) -- Molina Healthcare (MOH) shares are down 1.22% to $67.42 in afternoon trading on Thursday after the Medicaid-related solutions provider announced the pricing of its secondary offering of 5 million shares.

The company priced the offering at $67.75 per share, a slight decrease from the stock's previous closing price of $68.25.

UBS Securities (UBS), Bank of America/Merrill Lynch (BAC) and Wells Fargo Securities (WFC) are acting as the lead book running managers for the offering.

The company plans to use the proceeds from the offering for general corporate purposes including funding for acquisitions

TheStreet Ratings team rates MOLINA HEALTHCARE INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate MOLINA HEALTHCARE INC (MOH) 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 robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins."

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

  • MOH's very impressive revenue growth greatly exceeded the industry average of 13.2%. Since the same quarter one year prior, revenues leaped by 53.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MOLINA HEALTHCARE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, MOLINA HEALTHCARE INC increased its bottom line by earning $1.28 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $1.28).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 525.9% when compared to the same quarter one year prior, rising from $4.50 million to $28.15 million.
  • Net operating cash flow has significantly increased by 162.51% to $553.63 million when compared to the same quarter last year. In addition, MOLINA HEALTHCARE INC has also vastly surpassed the industry average cash flow growth rate of 1.62%.
  • Powered by its strong earnings growth of 460.00% and other important driving factors, this stock has surged by 67.39% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • You can view the full analysis from the report here: MOH Ratings Report

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