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

dividend.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well

as a detailed explanation of our ratings

system here.