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MarketScreener Homepage  >  Equities  >  Nyse  >  Anthem, Inc.    ANTM

ANTHEM, INC.

(ANTM)
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Anthem CFO says insurer could make 'meaningful' acquisition

05/19/2015 | 11:18am EST

(Reuters) - The financial chief of Anthem Inc (>> Anthem Inc), the second-largest U.S. health insurer, said on Tuesday that low interest rates and other conditions make it a good time for an acquisition, adding to speculation about merger activity in the sector.

(Reuters) - The financial chief of Anthem Inc (>> Anthem Inc), the second-largest U.S. health insurer, said on Tuesday that low interest rates and other conditions make it a good time for an acquisition, adding to speculation about merger activity in the sector.

Cheap debt is creating opportunities for companies to grow through acquisitions, Anthem Chief Financial Officer Wayne DeVeydt told investors during the UBS Global Healthcare Conference in New York.

"I like the pricing environment a lot and we have a lot of capacity to work with to do a cash transaction of meaningful size - and it would be transformative," DeVeydt said.

DeVeydt's comments came against a backdrop of renewed speculation about the potential for a major insurance deal that would shrink the field of large U.S. players from five to four.

Analysts have said for years that Anthem and No. 3 insurer Aetna Inc (>> Aetna Inc) are possible acquirers of smaller national competitors including Humana Inc (>> Humana Inc) and Cigna Corp (>> CIGNA Corporation). Last week, Leerink Research reignited that talk when it said in a research note after meeting with Aetna management that a deal between Aetna and one of the smaller players was likely, which pushed shares in the sector higher.

The last major acquisition by Anthem was its purchase of government healthcare provider Amerigroup in 2012 for $4.5 billion. Aetna purchased Coventry, which also sells healthcare plans paid for by the U.S. government, in 2013 for about $5.6 billion.

Humana has a market capitalization of $26.5 billion and Cigna is worth $34.3 billion.

There is also a field of smaller Medicaid providers that are acquisition targets, according to analysts. These include Molina Healthcare Inc (>> Molina Healthcare, Inc.), WellCare Health Plans Inc (>> WellCare Health Plans, Inc.), Health Net Inc (>> Health Net, Inc.) and Centene Corp (>> Centene Corp). Their market capitalizations range from $3.5 billion to $8.3 billion.

Anthem recently closed on the purchase of Simply Healthcare, a Medicaid provider in Florida.

DeVeydt said the company was looking at expanding its Medicare business in Florida, Texas and California - three of the biggest healthcare markets.

"We would clearly love to have more scale in Medicare but our focus is first targeting the strategic markets that matter most," he said, referring to those three states. He said the company could increase its business in New York, Ohio and California without acquisitions.

(Reporting by Caroline Humer in New York; Editing by Matthew Lewis)


© Reuters 2015
Stocks mentioned in the article
ChangeLast1st jan.
ANTHEM, INC. 1.21% 326.42 Delayed Quote.1.66%
CIGNA CORPORATION -0.85% 218.9 Delayed Quote.5.15%
HUMANA INC. 0.45% 406.81 Delayed Quote.-0.84%
MOLINA HEALTHCARE, INC. -1.35% 220.74 Delayed Quote.3.79%
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Financials (USD)
Sales 2020 120 B - -
Net income 2020 4 591 M - -
Net Debt 2020 17 511 M - -
P/E ratio 2020 18,1x
Yield 2020 1,16%
Capitalization 81 182 M 81 182 M -
EV / Sales 2020 0,82x
EV / Sales 2021 0,74x
Nbr of Employees 70 600
Free-Float 99,5%
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Technical analysis trends ANTHEM, INC.
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 23
Average target price 363,74 $
Last Close Price 326,42 $
Spread / Highest target 39,1%
Spread / Average Target 11,4%
Spread / Lowest Target -8,09%
EPS Revisions
Managers and Directors
NameTitle
Gail Koziara Boudreaux President, Chief Executive Officer & Director
Elizabeth E. Tallett Independent Chairman
John E. Gallina Chief Financial Officer & Executive Vice President
Ramiro G. Peru Independent Director
Julie Anne Hill Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
ANTHEM, INC.1.66%81 182
UNITEDHEALTH GROUP0.18%333 321
CIGNA CORPORATION5.15%79 081
HUMANA INC.-0.84%53 838
CENTENE CORPORATION6.60%37 101
MOLINA HEALTHCARE, INC.3.79%13 090