May 25, 2023
Top 10 Stock Humana Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Humana – Top 10 Stock in Employee Satisfaction Leaders in the United States
Humana is listed as a top 10 stock on May 25, 2023 in the market index Employee Focus US because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 94 (top 94% performer), Obermatt assesses an overall strong buy recommendation for Humana on May 25, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Managed |
| Index | Employee Focus US, Human Rights, SDG 12, SDG 3, SDG 8, D.J. US Health Care, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Humana Strong Buy
| 360 METRICS | May 25, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 65 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 85 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 59 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 82 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 94 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 94 (better than 94% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock Humana are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for Humana. The consolidated Value Rank has an attractive rank of 65, which means that the share price of Humana is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 65% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 85, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The company is also safely financed with a Safety rank of 59. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 82. ...read more
RECOMMENDATION: With a 360° View of 94, Humana is better than 94% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 65), above-average growth (Growth Rank of 85), an indication that the company is safely financed (Safety Rank of 59) and positive market sentiment in the professional investor community (Sentiment Rank of 82), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Humana is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Humana very positive
ANALYSIS: With an Obermatt Sentiment Rank of 82 (better than 82% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock Humana is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Humana. Analyst Opinions are at a rank of 57 (better than 57% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 90, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Humana. The Professional Investors rank is 84, which means that currently, professional investors hold more stock in this company than in 84% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 62 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 62% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 82 (more positive than 82% compared with investment alternatives), Humana has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Humana stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Humana Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 65 (better than 65% compared with alternatives), Humana shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Humana. Price-to-Sales (P/S) is 69, which means that the stock price compared with what market professionals expect for future sales is lower than for 69% of comparable companies, indicating a good value concerning Humana's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 69, which means that dividends are expected to be higher than 69% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 74% of alternatives (only 26% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than 57% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 65, is a BUY recommendation based on Humana's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: Humana Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 85 (better than 85% compared with alternatives) for 2022, Humana shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Humana. Sales Growth has a value of 67, which means that, currently, professionals expect the company to grow more than 67% of its competitors. The same is valid for Profit Growth with a value of 58 and for Capital Growth with 74. In addition, Stock Returns had an above-average rank value of 79, which means they have been higher than 79% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 85, is a BUY recommendation for growth and momentum investors. Since all Growth Ranks are positive, Humana exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future, or if the current performance is only a temporary recovery from a very low point in the company's history, such as a turn-around. In the case of a turn-around situation, the current performance is a positive indicator that the company is on the right track. ...read more
Safety Strategy: Humana Debt Financing Safety above-average
| SAFETY METRICS | May 25, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 32 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 67 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 68 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 59 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 59 (better than 59% compared with alternatives), the company Humana has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Humana is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Humana. Refinancing is at 67, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Liquidity is also good at 68, meaning the company generates more profit to service its debt than 68% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 32, which means the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 59 (better than 59% compared with alternatives), Humana has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Humana could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Humana Top Financial Performance
| COMBINED PERFORMANCE | May 25, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 65 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 85 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 68 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 86 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), Humana (Health Care Managed, USA) shares have much better financial characteristics than comparable stocks. Shares of Humana are a good value (attractively priced) with a consolidated Obermatt Value Rank of 65 (better than 65% of alternatives), show above-average growth (Growth Rank of 85), and are safely financed (Safety Rank of 59), which means low debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 86, is a strong buy recommendation based on Humana's financial characteristics. As the company Humana's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 65), above-average growth (Obermatt Growth Rank of 85), and indicate that the company is safely financed (Obermatt Safety Rank of 59), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Humana. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.