Anthem (ANTM) is one of the largest private health insurance organizations nationwide, providing medical benefits to roughly 44 million medical members. The company offers employer, individual, and government-sponsored coverage plans. It is also the largest single provider of Blue Cross Blue Shield branded coverage.
The company is benefiting from a premium rate increase and higher membership. In addition, acquisitions have enabled the company to boost its Medicare Advantage growth. ANTM also saw a rise in usage of its virtual care services. Plus, its Medicare and Medicaid businesses should help increase its membership going forward.
The company’s balance sheet looks solid with a debt-to-equity ratio of only 0.6. Growth also looks strong with earnings rising an average of 21.1% per year over the past five years. Analysts expect earnings to surge 100.8% year over year in the current quarter, leading to a Growth Grade of A in our POWR Ratings system.
The stock also looks undervalued with a forward P/E of 14.49. ANTM was showing bullish momentum in October, but performance has been mixed since, as shown in the chart below.
Take a look at the 1-year chart of ANTM below with added notations:
Chart of ANTM provided by TradingView
ANTM jumped higher back in October, eventually moving into a rectangle pattern (blue) with support at around $414 and a $440 resistance area. Whichever of those two levels breaks will likely dictate the stock’s next big move.
A long trade could be entered on a break of resistance, with a protective stop set underneath the point of entry. A short trade could be pleased on a bread under the support level, with a protective stop placed above the entry point.
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ANTM shares were trading at $422.12 per share on Wednesday morning, down $1.54 (-0.36%). Year-to-date, ANTM has gained 32.69%, versus a 26.15% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
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