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Two Ways: Humana's Sickeningly Good Quarter

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Strengthen your portfolio in good times and bad.

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A Blowout Quarter for Humana

Earnings at Humana (HUM) spiked in the first quarter as the company benefited from higher premiums and Medicare health plans for seniors. Net Income rose to $205.7 million, or $1.22 per share, compared with $80.2 million, or $0.47 per share, a year earlier. According to Reuters, analysts were expecting $1.14 per share. Revenues increased 10.8% to $7.71 billion.

The company's Medicare Advantage membership jumped 16% year-over-year, while lower claims expenses for its prescription drug plans and implementation of premiums also helped results. And despite fears of health care reform, the insurer raised its full year earnings outlook to between $6.10 and $6.20 per share. This bests its previous projection of $5.90 to $6.10 per share.

From the Bull Pen: With fear over swine flu taking hold, one can look to healthcare plays for upside exposure. The diversified ishares Health Care ETF (IYH) may be a prudent option rather than chasing Humana itself; a sell stop can be set below $30-$31 depending on one's risk profile.

From the Bear Cave: Restaurant stocks are likely to come under pressure this morning. One can look to Chipotle Mexican Grill's (CMG) pattern of island reversal. A buy stop can be set 2% above entry.

Quick Check Around the World

Asian trading closed with the Hang Seng -2.74%, Nikkei 0.21%, India 0.38%, Shanghai -1.77% and Taiwan -2.99%.

Glancing towards Europe, we see the CAC -1.35%, DAX -0.96%, FTSE -0.58%

As of 8:10 AM EST, S&P Futures are trading -17 to 849.00, and Nasdaq futures are -21 to 1353.00.

A Look at Commodities

Over in commodities, crude oil is trading -2.62 to 48.93 while gold is -0.7 at 912.30 this morning. Silver is +0.100 to 12.990 and copper -7.80 to 197.25.

The dollar index is +0.5350 to 85.4550.

No economic events today but click here for the full trading radar.

Welcome back, Minyans. Good luck today.



In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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