The four payers are ensnared in consolidation efforts and federal litigations. Indianapolis-based Anthem is proposing to acquire Bloomfield, Conn.-based Cigna in a $54 billion deal, and Hartford, Conn.-based Aetna looks to acquire Louisville, Ky.-based Humana in a $37 billion transaction. However, both deals face U.S. Department of Justice antitrust lawsuits.
Analyst Ari Wald, head of technical analysis at New York City-based investment firm Oppenheimer, told CNBC the four stocks are a must sell. Mr. Wald said overall the managed care industry is weak, and Anthem, Humana and Cigna stocks are all down year-to-date.
Specifically, Anthem stocks have fallen 12 percent since the beginning of 2016, and Aetna stocks have declined in the past month. Cigna stock has fallen 15 percent year-to-date, and Mr. Wald said the stock is below a two-year support level at $135. He predicted Cigna stock may have a new ceiling of $125, and could fall to $110.
Kevin Caron, market strategist at New York City-based investment firm Stifel Nicolaus, said Monday on CNBC’s Trading Nation the managed care stock outlook is not entirely negative. While the business is slow, it is still positive and profitable.
The four insurers’ stocks closed at the following amounts Oct. 19:
Aetna — $111.06
Anthem — $123.83
Cigna — $123.55
Humana — $173.90
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