CA - Humana: A Golden Buying Opportunity As Fears Potentially Peaked
2024-02-03 09:00:00 ET
Summary
- Humana Inc. investors have experienced a significant drop in the company's stock price, reaching lows not seen since January 2022, making a two-year round trip.
- The concerns over Humana's poor operating performance and shocking guidance for 2024 are justified, leading to the steep selloff.
- The company downgraded its 2024 outlook and stated that previous forecasts for 2025 are no longer achievable. As a result, growth-focused investors likely exited.
- I assessed that near-term headwinds are expected to persist. However, with HUM's FY25 adjusted P/E priced well below its 10Y average, the market hasn't reflected its potential turnaround.
- I explain why I believe the opportunity to initiate a position in HUM is timely, as those who wanted to run have likely fled.
Humana Inc. ( HUM ) investors likely did not anticipate such a hammering in HUM over the past month, as it revisited lows not seen since January 2022. With HUM not priced as a typical value play even after the selloff ("D" valuation grade) or an income play (forward dividend yield of 1%), growth investors likely capitulated....
Humana: A Golden Buying Opportunity As Fears Potentially Peaked