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Fly News Breaks for April 17, 2019
Apr 17, 2019 | 08:47 EDT
Stephens analyst Scott Fidel noted that the managed care group has sharply underperformed the S&P 500 over the last month amid "political rhetoric" around point-of-sale drug rebates and Medicare for all policy proposals, though he believes the issues facing the sector right now "seem modest in comparison" to the "dark days of 2008-2010." While recent Medicare for all proposals have rattled investors, "they will face enormous uphill battles," Fidel tells investors. Hospital stocks have outperformed MCOs year-to-date, but the group declined about 9% yesterday and underperformed the MCO group, which Fidel attributes to acknowledgement by industry bellwether UnitedHealth (UNH) of the significant disruptive nature of Medicare for all, which may have sparked additional fears, as well as one less calendar day being called out by UnitedHealth as benefiting Q1 MLRs and Johnson & Johnson's (JNJ) earnings call commentary on declining sequential hospital admissions from Q4. Publicly traded companies in the hospital space include Community Health (CYH), HCA Healthcare (HCA), LifePoint (LPNT), Tenet (THC) and Universal Health (UHS). Publicly traded companies in the managed care space include Anthem (ANTM), CVS Health (CVS), Centene (CNC), Cigna (CI), Health Net (HNT), Humana (HUM), Molina Healthcare (MOH), UnitedHealth (UNH) and WellCare (WCG).
Jun 25, 2019 | 12:00 EDT
According to a story out yesterday, from CNBC's Ari Levy and Christina Farr, UnitedHealth just bought a company called PatientsLikeMe, which allows people who have similar medical conditions to connect. "PatientsLikeMe, a health-tech start-up that was forced by the Trump administration to seek out a buyer because its majority owner is Chinese, has found a landing spot: UnitedHealth Group," added the CNBC story. Reference Link
Jun 24, 2019 | 12:55 EDT
Bearish flow noted in Anthem with 1,888 puts trading, or 2.0x expected. Most active are 6/28 weekly 290 puts and 6/28 weekly 292.5 puts, with total volume in those strikes near 510 contracts. The Put/Call Ratio is 1.71, while ATM IV is up over 2 points on the day. Earnings are expected on July 24th.
Jun 24, 2019 | 12:01 EDT
Centene Corporation (CNC) and WellCare Health Plans (WCG) announced that the stockholders of both companies approved all proposals regarding Centene's pending acquisition of WellCare pursuant to the definitive merger agreement between the parties. At the special meeting of Centene's stockholders held in St. Louis, Centene stockholders voted to approve proposals of the pending transaction with WellCare. Approximately 85% of the outstanding shares of Centene common stock voted at the Centene special meeting, with over 99% voting to approve the issuance of Centene common stock in connection with the acquisition. At the special meeting of WellCare's stockholders held separately in New York, WellCare stockholders voted to approve proposals of the pending transaction with Centene. Approximately 83% of the shares of WellCare outstanding common stock voted at the special meeting, with 99% voting in favor of the adoption of the merger agreement. The companies are working through the 26-state insurance approval processes required for completion of the transaction. To date, all required Form As and Form Es have been filed, and conditional approvals have been obtained in four states-Alabama, Arkansas, Kentucky and Missouri. Missouri's state approval is conditioned on the parties' divestiture of certain Medicaid assets in Missouri. In addition, Centene and WellCare each received a request for additional information and documentary information and materials from the Department of Justice, which was not unexpected given the size of the transaction. The companies continue to work expeditiously and cooperatively with the DOJ through this process. Centene and WellCare do not plan to, and expressly disclaim any obligation to, provide updates regarding the status of the regulatory approvals for the transaction. The companies reaffirm their expectation that the transaction will be completed by the first half of 2020.
Jun 24, 2019 | 08:08 EDT
Tenet (THC) and Aetna, a CVS Health (CVS) company, announced that they have entered into a new multi-year agreement that provides Aetna members with continued in-network access to all of Tenet's hospitals, emergency centers, outpatient centers and employed physicians. The agreement is for a term of four years with an option to extend for a fifth year.
Jun 24, 2019 | 07:57 EDT
Canaccord analyst Richard Close said he believes the recent weakness in HMS Holdings (HMSY) shares is overdone. The weakness was attributed to reports UnitedHealth (UNH) will be buying Equian, a payment integrity services provider. The analyst believes the pullback was based on fears of increased competition and potential risk that HMS will lose UnitedHealth as a customer. He said although both provide integrity services to healthcare, Equian does not provide COB services, which accounted for 66.4% of HMS's revenue. As a result, he does not believe this transaction should raise any concerns. Close reiterated his Buy rating and $39 price target on HMS Holdings shares.
Jun 23, 2019 | 19:17 EDT
Catch up on the weekend's top five stories with this list compiled by The Fly: 1. Eldorado Resorts (ERI) has agreed to merge with Caesars (CZR) in a cash and stock deal that values its peer at about $18B including debt, Reuters' Greg Roumeliotis reported, citing people familiar with the matter. The deal, which is expected to be announced on Monday, values Caesars at close to $13 a share, according to the sources. 2. FedEx (FDX) said an operational error prevented a Huawei package from being delivered to U.S., just weeks after the delivery company said an error led to the Chinese firm's packages being misdirected, Reuters' Kanishka Singh wrote. China's Global Times newspaper said in a tweet later the company is likely to be added to China's "unreliable entities list" due to the incident. 3. Passed unanimously last year, the California Consumer Privacy Act is the state's underappreciated attempt to regulate the collection and sale of personal data by Facebook (FB), Alphabet 's (GOOGL) Google, and other companies that rely on targeted advertising and the sale of consumer data to power their businesses, Eric Savitz wrote in this week's edition of Barron's. The law, which goes into effect on January 1, 2020, will force almost all companies to change the way they collect, handle, and share data on Californians, he noted, and the effects will spread everywhere. 4. In one of the biggest openings of all time for an animated movie, Pixar and Disney's (DIS) "Toy Story 4" won the North American box office over the weekend with $118M. Overseas, the movie launch to $120M for a $238M globally, a record for the genre. "Toy Story 4" received 98% on Rotten Tomatoes, while sporting an A CinemaScore. 5. Humana (HUM), Planet Fitness (PLNT), Marriott (MAR), Exxon Mobil (XOM), Chevron (CVX), Exelon (EXC), Prologis (PLD), NextEra (NEE) and Merlin Entertainments (MERLY) saw positive mentions in this week's edition of Barron's.