HUM - Humana: After Latest Selloff Crisis-Ridden Insurer May Be Better Off Than It Seems

2024-04-03 09:15:17 ET

Summary

• Humana stock has experienced significant fluctuations in recent years, but has historically been able to bounce back after market downturns.
• However, in 2024, Humana has faced challenges due to rising healthcare costs and increased competition in the Medicare Advantage sector.
• The company's recent financial results and negative market sentiment have led to a sharp decline in HUM stock price, raising doubts about the effectiveness of the "buy the dip" strategy.
• Nevertheless, Humana may be playing a subtle long game while its rivals overspend on short-term membership growth. It may be the "buy the dip" strategy is not dead yet.

Investment Thesis

I have been covering the health insurance giant Humana Inc. ( HUM ) and its fluctuating fortunes - in terms of its share price performance - for Seeking Alpha since 2019, and one its key strengths has been its ability to bounce back after the market has sold shares in response to perceived crises.

In 2018, for example, Humana stock plunged in response to "macro issues such as the trade war with China, government shutdown, concerns about the economy," I wrote, sinking from >$330, per share, to <$265. Within 6 months, however, the stock price had risen >$365....

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