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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Humana Inc. (XNYS:HUM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HUM
Name:
HUMANA INC. (XNYS:HUM)
Sector:
7.00M
Industry:
Healthcare Plans
CEO:
Mr. Bruce Broussard
Total Employees:
95,500
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -164.93% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HUMANA INC.(HUM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND HEALTHCARE PLANS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
484.4
One Month Price Target:
$486.51
Six Month Price Target :
$497.08
Likely Price in One Year's Time:
Ticker:
$509.75
Likely Trading Range Today Under (Normal Volatility)
$482.82
Price Upper limit ($) :
$486.74
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$461.06
This week:
$432.22
This month :
$380.04
Other Primary facts
Market Cap:
60.69B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
126.55M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.93%
-19.37%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$592.63
$542.57
$376.17
$426.23
Medium risk (<10%) entry points
Buy Call
Sell Call
$526.28
Buy Put:
Sell Put:
$515.60
$442.38
$453.20
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HUM
Sharpe Ratio:
2.90%
Comparison:
HUM, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -26.35% lower than the industry
& ratio is 27.43% higher than the market/S&P 500 average
Average Returns/Yield of
HUM
Daily returns:
0.08%
Weekly returns:
0.39%
Monthly returns:
1.56%
Yearly returns:
24.40%
Comparison of returns:
Average annual returns/yield (last 3 years) is -23.19% below industry average
Classification:
HUM, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.23
Statistical test of Returns:
HUM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.38%
Weekly Volatility:
5.33%
Monthly Volatility:
10.66%
Yearly Volatility:
36.93%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.86%
Volatility in last five trading days has been -64.03% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.82%
Weekly VaR:
-10.77%
Monthly VaR:
-21.54%
How Much Can the price of
HUM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-74.63%
This translates to price declining to:
$396.45
This translates to price declining to:
$122.88
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
HUM is a 52.06% riskier investment compared to the market/S&P 500 & is 30.27% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 2.44% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HUM
Beta in relation to market/S&P 500--0.78
Expected beta in 1 year's time:
0.639
Expected beta in 3 year's time:
0.903
Unlevered (debt free) Beta:
0.479
Beta in relation to Nasdaq (XNAS):
0.672
Beta in relation to all global stocks::
0.839
Beta Comparison & Analysis
Beta of competitors/peers::
0.838
Beta is -7.06% lower than peers
Average Industry Beta:
0.719
Beta is 8.28% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
16.77%
Sustainable growth rate is 14.69% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.103
Alpha is -37.17% below industry average alpha yield
Alpha is 653% higher than market/& is unsustainably high
Analysis of Cost of Capital of
HUM
Equity cost of capital:
0.085
Equity cost of capital is 5.05% above industry mean WACC
Unlevered (without debt) cost of capital:
5.22%
Before-tax cost of debt:
2.62%
After-tax cost of debt:
2.07%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.07%
WACC is -1.20% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$682.45
Revenue growth rate per share of (3Y):
4
Annual revenue growth rate is -22.01% below industry average
EPS:
$23.58
Expected Annual growth rate of EPS (3Y):
3.92%
Expected future EPS growth rate is -62.09% lower than the Healthcare Plans industry
Free cash flow (FCF) per share:
$16.01
Balance sheet equity growth per share: 42.72%
Equity growth rate per share is 222.70% higher than the industry
Debt per share
$89.17
EBITDA per share
$36.91
Valuation Analysis Today of
HUM
P/E Ratio:
19.76
P/E Ratio of Competitors/Peers:
41.72
P/E ratio is -52.62% lower than main peers & is -10.03% lower than the industry
Stock price/value with industry average P/E ratio: $517.99
HUM is -6.48% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $94.55
Present value of the expected future dividends only: $66.22
P/S (Price to Sales ratio):
0.71
Price to sales ratio is -8.67% below the industry mean
P/B (Price to book value ratio):
4
Price to free cash flow: 30.25
-
Net income growth rate (3Y):
86.19%
Net income growth rate is -206.91% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 3.00%
Dividend yeild: 0.61%
Previous Dividend: $0.79
Previous adjusted dividend: $0.79
Previous Dividend: $2.98
Expected next dividend best case: $0.85
Expected next dividend worst case: $0.73
Average dividend payment (long-term): $0.68
Average dividend increase/decrease (growth rate) % per period: 3.82%
Expected next dividend payment date: 27/10/2022
Expected next dividend record date: 28/09/2022
-
Previous dividend payment date: 29/07/2022
Previous dividend record date: 30/06/2022
-
Dividend History:
2022-06-29--$0.79
2021-12-30--$0.70
2021-06-29--$0.70
2022-03-30--$0.79
2021-09-29--$0.70
2021-03-30--$0.70
Dividend growth rate is 13.60% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
73.67%
Net debt to equity ratio:
55.02%
Debt to assets ratio:
24.37%
Net debt to assets ratio:
18.20%
Debt-to-asset ratio is -62.25% below industry average
Ability to repay debt:
Interest coverage ratio:
13.42
Interest coverage ratio is 354.11% more than industry average
Looking forward:
Debt growth rate:
83.67%
Annual debt growth is -81% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.615
Statistical significance of correlation:
HUM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.624
Stock price is -1.47% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.624
Correlation of price movement with Nasdaq (^IXIC):
-0.005
Covariance of price movement with the market:
-0.007
Kurtosis
15.46
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.186
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HUM
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
3.64%
Operating profit margin is -222.95% lower than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
15.22%
Effective tax rate is -8.54% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
19.81%
Return on equity (ROE) is -331.47% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
6.55%
Return on assets (ROA) is -269.87% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
0
-
Cash Conversion Cycle (days):
-1520.7
Cash conversion cycle is -673.79% below industry average
The remaining useful life of property plant & equipment is: 11.5 years
Stock based compensation to net income ratio:
1.42%
In-depth Efficiency Analysis
Revenue generated per employee:
904.4K
Each employee generates -40% less revenue than industry average revenue per employee
EBITDA generated per employee:
48.9K
Each employee generates -37% less EBITDA than industry average revenue per employee
Profit generated per employee:
31.8K
Each employee generates -24% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.1K
Each employee generates -99% less free cash flow than industry average revenue per employee
Assets/Capital per employee
320.4K
Each employee generates -99% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
HUM
CENTENE CORPORATION (XNYS:CNC)
IQVIA HOLDINGS INC (XNYS:IQV)
AGILENT TECHNOLOGIES, INC. (XNYS:A)
Takeda Pharmaceutical Company Limited (XNYS:TAK)
Alcon Inc. (XNYS:ALC)
MCKESSON CORPORATION (XNYS:MCK)
VEEVA SYSTEMS INC. (XNYS:VEEV)
METTLER-TOLEDO INTERNATIONAL INC. (XNYS:MTD)
RESMED INC. (XNYS:RMD)
Current Analyst Ratings
Strong buy�29%
Buy�21%
Hold�29%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
86.37B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
-
8.11B
-
-
-
-
348.00M
750.00M
4.67B
3.15B
3.04B
3.53B
538.00M
3.04B
Statement of Cash Flow
Date:
Period:
205.00M
Differed Income Tax :
-
Stock Based Compensation :
43.00M
Change in Working Capital :
- 968000.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
92.00M
Net Cash Provided by Operating Activities:
302.00M
Investments in PP&E:
- 295000.00K
Net Acquisitions:
- 74000.00K
Purchases of Investments:
- 2161000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
4.86B
13.09B
17.96B
3.17B
-
-
-
3.19B
11.14B
2.65B
13.62B
-
-
30.60B
76.91B
46.31B
15.24B
2.01B
-
-
-
17.24B
11.29B
-
11.29B
25.01B
30.97B
33.00M
23.92B
- 572000.0K
- 8057000.00K
March 31, 2022 at 6:00:00 AM
82.83B
15.32B
46.29B
26.71B
13.29B
8.4B
1.88B
-
- 648000.00K
-
-
- 1024000.00K
- 91000.00K
2.93B
1.82B
-
1.47B
4.86B
3.39B
302.00M
- 295000.00K
7.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
HUM
2023
2024
2025
2026
2027
$512.30
$731.63
$769.92
$810.22
$852.63