CVH forecasts a average eps of $1.8 for 2009 placing it's PE at 8. This sector may not see the 15+ PEs of the past decade, but I'd expect some expansion to the 12 range or a 50% gain. CVH is now the 5th largest position of the Growth Fund at 4.2% of the portfolio following an added purchase yesteday on the HUM earnings.
CVH was a $60 stock when 2008 began so getting back to $15 isn't that exciting, but I wouldn't expect this sector to return to its old highs. Too much scrutiny over the next 4 years will be placed on the profits of this sector for it to regain the luster of the last 5 years. Regardless, Stone Fox would expect a stock like CVH to either get a bid or at the very least expand its multiple as the market realizes that earnings won't be depleted to the drastic levels feared.
- Revenues increased 21.5% from the prior year quarter
- GAAP cash flows from operations of $358.2 million
- Operating revenues totaled $3.6 billion for the quarter with net earnings of $44.2 million, or $0.30 per diluted share.
- Earnings per share (EPS) on a diluted basis of $1.70 to $1.90
6:46AM Coventry Health Care beats by $0.05, beats on revs; guides FY09 EPS in-line, revs in-line (CVH) 14.21 : Reports Q1 (Mar) earnings of $0.30 per share, $0.05 better than the First Call consensus of $0.25; revenues rose 21.5% year/year to $3.57 bln vs the $3.39 bln consensus. Co issues in-line guidance for FY09, sees EPS of $1.70-1.90 vs. $1.79 consensus; sees FY09 revs of $13.59-13.99 vs. $13.49 bln consensus.