November 14, 2024
Top 10 Stock Humana Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Humana – Top 10 Stock in Dow Jones U.S. Health Care Providers Index
Humana is listed as a top 10 stock on November 14, 2024 in the market index D.J. US Health Care because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 94 (top 94% performer), Obermatt assesses an overall strong buy recommendation for Humana on November 14, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Managed |
| Index | Employee Focus US, Human Rights, SDG 12, SDG 3, SDG 8, D.J. US Health Care, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Humana Strong Buy
| 360 METRICS | November 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 89 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 59 |
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| SENTIMENT | ||||||||
| SENTIMENT | 21 |
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| 360° VIEW | ||||||||
| 360° VIEW | 94 |
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ANALYSIS: With an Obermatt 360° View of 94 (better than 94% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock Humana are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Humana. The consolidated Value Rank has an attractive rank of 89, which means that the share price of Humana is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 89% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 59. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 21. Professional investors are more confident in 79% other stocks. The consolidated Growth Rank also has a low rank of 3, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 97 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 94, Humana is better positioned than 94% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 89), and the financing structure is on the safer side (Safety Rank of 59). However, sentiment in the professional investor community is below-average (Sentiment Rank of 21), as is the growth momentum for the company (Growth Rank of 3). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Humana negative
ANALYSIS: With an Obermatt Sentiment Rank of 21 (better than 21% compared with alternatives), overall professional sentiment and engagement for the stock Humana is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Humana. Analyst Opinions are at a rank of 21 (worse than 79% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 58, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Humana. But the Professional Investors rank is low at 19, which means that professional investors hold less stock in this company than in 81% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 38, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 62% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 21 (less encouraging than 79% compared with investment alternatives), Humana has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Humana Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 89 (better than 89% compared with alternatives) for 2022, Humana shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Humana. Price-to-Sales is 81 which means that the stock price compared with what market professionals expect for future sales is lower than for 81% of comparable companies, indicating a good value for Humana's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 52% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 56. Compared with other companies in the same industry, dividend yields of Humana are expected to be higher than for 79% of all competitors (a Dividend Yield rank of 79). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 89, is a buy recommendation based on Humana's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Humana based on its detailed value metrics.
Growth Strategy: Humana Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 3 (better than 3% compared with alternatives), Humana shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Humana. Sales Growth has a rank of 22, which means that currently professionals expect the company to grow less than 78% of its competitors. The same is valid for Profit Growth, with a rank of 14, and Capital Growth with 24. In addition, Stock Returns have a below market rank of 17, which means that the stock returns have recently been below 83% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 3, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Humana Debt Financing Safety above-average
| SAFETY METRICS | November 14, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 38 |
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| REFINANCING | ||||||||
| REFINANCING | 67 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 75 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 59 |
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ANALYSIS: With an Obermatt Safety Rank of 59 (better than 59% compared with alternatives), the company Humana has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Humana is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Humana. Refinancing is at 67, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Liquidity is also good at 75, meaning the company generates more profit to service its debt than 75% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 38, which means the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 59 (better than 59% compared with alternatives), Humana has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Humana could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Humana Top Financial Performance
| COMBINED PERFORMANCE | November 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 89 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 75 |
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| COMBINED | ||||||||
| COMBINED | 86 |
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ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), Humana (Health Care Managed, USA) shares have much better financial characteristics than comparable stocks. Shares of Humana are a good value (attractively priced) with a consolidated Value Rank of 89 (better than 89% of alternatives), are safely financed (Safety Rank of 59, which means low debt burdens), but show below-average growth (Growth Rank of 3). ...read more
RECOMMENDATION: A Combined Rank of 86, is a strong buy recommendation based on Humana's financial characteristics. As the company Humana's key financial metrics exhibit good value (Obermatt Value Rank of 89) but low growth (Obermatt Growth Rank of 3) while being safely financed (Obermatt Safety Rank of 59), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 89% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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