First time poster long time regaurd
This was Anthem Bluecross Blueshield. They are now a conglomerate including pharmacy and specialty services through Carelon.
The Bad:
Recently they lost 1.5 million Medicaid enrollees due to an expiration of expanded eligibility from covid funds. (About 3% of total enrollment) And due to higher utilization of patients this quarter the expense ratio was 2.5% higher than normal. Even though revenue grew $1.5 billion, EPS took a big hit. $8.4 vs $9.7 ~ 20%. Not a good quarter. Share price dropped from 509 to 399 before semi recovering and hovering around 409-430. Down from ATH 560 in August 2024
Debt: $5 billion prior debt, with additional $5 billion just authorized.
Bull Case:
They insure nearly 46 million Americans. Private, Medicare & Advantage, Medicaid combined. 3rd largest Insurer in the US. Operate in 14 states normal operation and 26 states for Medicaid.
Medicare Advantage enrollment just started Oct 15 Ends Dec 7
Medicare enrollment continues to increase annually until peaking in 2030
These 1.5 million Medicaid patients that were dropped will need to seek insurance through one of ELVs more profitable segments Medicare or Advantage. Or through the private market. So I think we will see record enrollment in those segments and re-enrollment in Medicaid in 2025 if they drop coverage for 3 months, continue to be low income and qualify following year 2025 when they report lower incomes in 2024 to shoot for the threshold to get back on.
Buybacks: They authorized $11 billion for buy backs. $8 billion just announced Oct 17th when the price dipped. About 11% of the float. Market cap $96 billion. It's multi year but they are definitely going to buy in at 2 year lows it's trading at now.
https://www.elevancehealth.com/newsroom/elv-quarterly-earnings-q3-2024
Buyback history: high likelihood of $1 Billion + Q4 2024 as they have done in prior years.
https://ycharts.com/companies/ELV/stock_buyback
They just secured an additional $5 billion though notes expiring in 1-40 years for buybacks and acquisitions. Nov 1st 2024
https://www.publicnow.com/view/DF3C8835154DF071863F50FD678A47FF74F9CC84?1730411238
Wellpoint: prior acquisition named Amerigroup representing 6 states under the Elevance umbrella
Carebridge: Just purchased for $2.7 billion revenue for carebridge has expanded exponentially. 2024 year's growth rate was 150,000% to almost 900 million in revenue. Projected revenue for 2025 is $2.5 billion.
This is a massive additional to the company and huge profit potential. Also the Cofounder was Bill Frist former US Senator so this company has beneficial ties to politics.
https://www.inc.com/magazine/202309/bill-saporito/carebridge-its-the-greatest-problem-in-health-care-americas-fastest-growing-company-is-tackling-it.html
Carelon: serves 1/3 Americans. Revenue grew 20% to $13.8 billion. Operating gain was $800 million in Q3. This is where Elevance is expanding most. This is where the most margin can be grown.
P/E ratio: 15, highly profitable monopolistic company with $15 billion cash on hand, which still increased in the 'bad' last quarter by $1.3 billion
Blue chip stock: this is not a crazy valuation play, everyone needs Healthcare and this company highly profitable already. The majority of the Healthcare sector all dipped when Medicaid changed. Even if the election causes turmoil in the markets investors run to blue chips first. It's float is owned by 49% institution investors.
Positions: 26 shares ~ $11,000 @ 431
34 shares ~ $14,000 @ 413
( I have scwab and robinhood, I'm a pussy and calls are Hella expensive)
This is YOLO for me. 95% of my holdings in ELV.
All my Palantir profit.
I believe the floor is in at 400 and should turn around quickly. 5 year chart shows dips only last 5-30 days before trend reverses. Prediction of 500+ Q4 2024 earnings. 550+ Q1 2025. The buybacks should increase EPS and the company is strategically acquiring higher margin company's and expanding.
This is not financial advice. Invest at your own risk.