Shares of Coventry Health Care (CVH) are down 4% in early
trading today, after the company reported fourth quarter profits taking a hit
from increased medical costs and other expenses.
The company reported net income of $88.2 million, or 60
cents per share, down from $184.3 million, or $1.18 per share, during the same
period a year before.
Sales were up 8 percent to $3.02 billion from $2.79
billion, despite a drop in membership for its commercial business division fell
to 2.8 million from 3.1 million.
Looking ahead, management reaffirmed last month's reduced
guidance for 2009 EPS to come in a range of $1.70 to $1.90.
The Bottom Line
Shares of CVH are way off all-time highs of $62, which it hit in September of
2007. The stock has technical support in the $9-11 price area. If that fails to
hold, we could possibly see $6 next. If the shares can begin to firm up and
move higher, we see overhead resistance around the $15 level. We do not
currently rate this non-dividend paying stock, but we do monitor the news
closely, as well as the sector it is in.
Coventry Health Care (CVH) does not currently pay a
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