CI - Cigna: Time To Sell The Stock After A 50% Return? No Here's Why

2024-04-09 08:45:00 ET

Summary

• The Cigna Group is one of the few companies that have outperformed the AI-fantasy-driven S&P 500 Index by a wide margin.
• After a 50% return in less than a year and a new all-time high, it's fair to ask whether it's wise to sell Cigna stock now.
• In this update, I share my view on Cigna's performance in 2023 and explain why I decided to hold on to my Cigna shares - despite the historically expensive valuation.

Introduction

The Cigna Group ( CI ) is one of those companies that I have to admit I underestimated at first glance. I originally covered CI stock back in June 2022 when it was trading at $260. At the time, I concluded that there wasn't significant upside potential due to its comparatively weak profitability, regulatory risk, and still high debt - clearly, I was wrong, as I discussed in my November 2022 update , when CI had appreciated roughly 25% to $320.

But it was only a month later that the insurance stock reversed course and fell to $240 in the following months for a number of reasons. In my view, the selloff was unwarranted, and I eventually opened a position as disclosed in my May 2023 article . Of course, it was more luck than sense that I caught the bottom so well, but I nonetheless kept Cigna stock on my watch list because I almost never buy an entire position at once....

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