I ran a DCF analysis...
I assumed 3% growth the next 10 years... I shaved $7 off their book value. I plugged in $3 earnings (estimates are for over $6 this year). I still get fair value of $47 assuming these horrific estimates...
I bot HUM. It makes no sense not to own it.
The market is taking a very short term view of this company. They just can't lose money fast enough to justify the current price.
They'd have to earn around .80/share this year to justify the current price. That means they have to show huge losses for the rest of the year because they made a lot more than that last q. If someone can justify 35.89 as a fair price -- I'd love to hear it. The margin of safety is enormous here. You have to give when the market is pricing companies on political news that assume impossible scenarios.
Another point: How hard can you squeeze health insurers? Everyone calls them greedy but profit margins are less than 3% for HUM. There's not a whole lot of fat to cut here.
Obviously today's action is understandable... people want to be in what works today. Which is oil services. Problem is, I don't think oil services with OIH at 122 is going to work tomorrow. So I'm skating where the puck is going. But it feels like crap.