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Healthcare is all the Rage

David Becker
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With new technology continuing to make its way through the healthcare sector, large insurance companies in the pace are bound to benefit. Aetna, Inc (NYSE:AET) is poised to outperform as it operates as a diversified health care benefits company in the United States. The company operates in three segments: Health Care, Group Insurance, and Large Case Pensions.

The stock price should benefit from the move into mobile health. Aetna will use the Care4Today Mobile Health Manager mobile app, developed by Johnson & Johnson’s Janssen Healthcare Innovation group, into its CarePass Platform.

The 52-week range for the stock price is $ 44.38 – $69.47, and it hit a new fresh 52-week high in December. Earnings declined 3% quarter over quarter but the 3-year growth rate of earnings is positive 15%. Sales increased 46% quarter over quarter and the 3-year growth rate of sales was 7%. The profit margin for the company is 7.4% and the company has a PE ratio of 12.

Recent insider purchased should be constructive for the stock price. Aetna CEO, Mark Bertolini, purchased slightly more than 130K shares on December 30, 2013 for a total value of 4.3 million dollars. Additionally, William Casazza, Senior Vice President and General Counsel, purchased slightly more than 75K shares on December 26, 2013 for a total value of 3.8 million dollars.

The technical picture shows a stock that has moved back to the top end of the range and is poised for a breakout. The stock price is holding against support near the 10-day moving average at near $67.70. The next level of target support is the 40-day moving average near $66.35. The accumulation distribution line is moving higher means that increasing prices are coming with increasing volume.

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