Universal American Financial Corp. (NYSE:UAM)
A health and life insurance holding company, with an emphasis on providing a array of health insurance and managed care products and services to the growing senior population.
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Recs
I think that UAM will get $14-15 in a takeover bid relatively soon. There are plenty of insurance companies on the hunt for an acquisition. Given UAMs continued struggles and its valuable membership, it’s a very likely target.
However, we don’t want to buy only because it might get taken over. There’s a great valuation to this stock…and I’m not even talking about the cheap P/E ratio. In this case, the stock is actually trading at book value. That’s right…for every $9.80 share you own, you’re getting roughly that much per share in tangible assets (cash minus debt and intangible assets). In other words, it’s currently being valued as if it will never earn another dime again. That’s crazy. This company is on its way to getting it’s SG&A expenses in order and should soon have its marketing sanctions lifted. It will be able to take in the large baby boomer crowd set to age-in to Medicare in 2012.
I wouldn’t wait too long to buy this one. There are plenty of insurance companies with extra money and they’re probably working on deals right now, especially with the depressed equity valuations. Even if UAM doesn’t get bought, trading at book value is ridiculous.
Recs
Good leadership, excellent market(aging baby boomers), great market share(second largest medicare part d provider), dropped sharply on 8/3/2010 providing an excellent value on a stock thats sure to outperform.
Recs
ResearchTeam Accumulate June26
Recs
Very solid income growth over the past few years, looks to be very well run with great potential, and a P/E around 9.5!
Recs
Currently trading at 68% intrinsic value, not as heavily followed company. Good entrance opportunity.
Recs
an O.K. price
Recs
Another potential takeover target.
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