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U.S. Equity Research News
Shove Downgrades Health Net (HNT) to UNDERPERFORM from MARKET PERFORM
January 12, 2009
Dave Shove, senior research analyst on our Healthcare team, has today downgraded Health Net (HNT) to an UNDERPERFORM rating from MARKET PERFORM.
From Shove's sector note: "With a 23% run up in the stock price last week, the opening days of 2009 have been overly generous to the valuation of Health Net, in our view. We believe this increase in the company’s share price is unfounded, and provides investors with an opportunity to reduce positions before FY2008 reporting on February 3. Health Net’s enrollment base and earnings stream is heavily weighted to Medicare Advantage and Medi-Cal, programs with profitability we view as uncertain. Meanwhile, the company is still in the preliminary stages of digesting a senior management shuffle. This hazardous economic operating environment has chinked the armor of even the cleanest companies. We would take our chips in this name off the table in order to ride into 2009 with a stronger cavalry."
To receive a full copy of the report or for more information, please contact your BMO Capital Markets representative.
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