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$39.32 -0.35 (-0.88%)
9/5/2008 2:35 PM

CIGNA Corp (CI)

CAPS Rating:
***

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.

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3

Avatar TheGarcipian (98.82) Submitted: 6/03/07 4:04 PM : Outperform Start Price: $56.08 CI Score: -10.49

A well-run and well-managed health care company, Cigna will continue to do well for the next few years, I believe. While its PEG ratio sits at an even-tempered 1.27 today (June 3rd, 2007) and Return on Assets is pretty thin (at 2.7%), this company has had a history of squeezing money out of that I-V line. One bother to me is that it has a high debt load (51% of equity), but remember part of its revenue comes from disability, life & accident insurance premiums, which have higher liability requirements. Still, its debt/equity is higher than Allstate's and Progressive's, something with which I'm not really comfortable in personally owning. Book value is at a very healthy 25% of the stock price; nice. Quarterly earnings growth (year-over-year) are suffering because of a poor performing Q2 in 2006, but that should be well behind them now. Hopefully, it's a continued growth story for Cigna from here forward.

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