Cigna Corporation (NYSE:CI)

CAPS Rating: 4 out of 5

The Company and its subsidiaries are an investor-owned health care organizations & are major providers of health care benefits which are offered through the workplace, including health care products & services, group disability, life & accident insurance.


Player Avatar TrojanFan (28.89) Submitted: 7/10/2009 1:53:00 PM : Underperform Start Price: $23.85 CI Score: -201.97

I'm looking for a weak managed health care company to give the thumbs down to and this may be it.

I have liquidity concerns for this company in the near-term and pricing concerns in the longer term.

A government sponsored (and subsidized) alternative HMO offering should really hurt this company's pricing and their sequential revenue is already weakening.

On the credit side, they are barely investment grade and their bond yields are pretty rich for a managed health organization which I'm taking as a signal of weakness.

Their dividend is anemic and they've already cut share buybacks out so that's signalling that they may not longer be able to support their own stock price through share buybacks.

Lastly, they are headquartered in Philadelphia and I have a general issue with the ethics of the business community in the greater Philadelphia area. That city has been the flashpoint for numerous business scandals that I'm aware of with Adelphia being the largest that comes to mind, but there are others. Must be something in the water (or possibly the sharing of book cooking techniques around the lockerrooms of the executive health clubs).

Thumbs down to Cigna!

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