Managed health care giant Humana is holding up well even as companies in other industries get whipsawed by inflation and the Fed's interest rate hikes to combat it. On Wednesday, the Relative Strength Rating for Humana stock climbed from 68 to 72.
It's a decent rating, but its other ratings tell a more bullish story.
Humana Stock Approaching Key Threshold
The upgraded 72 RS Rating means that Humana stock beat 72% of all companies for price performance this past year. The best stocks typically have an 80 or better RS Rating as they launch their biggest price moves. See if Humana can continue to show renewed price strength and clear that threshold.
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No one can say for certain where the market will be next year, but some analysts think the Fed's hoped-for soft landing might not happen. In downturns, stocks of consumer staples and health care companies often do well because they are necessities. Humana is one to look at if you're seeking security amid the market uncertainty.
Among its other ratings Louisville, Ky.-based Humana has a strong 86 Earnings Per Share Rating, putting it in the top 14% of companies for recent quarters and years profit growth.
Notably, its B Accumulation/Distribution Rating on an A+ to E scale with A+ tops indicates that big funds are buying more of its shares than selling. Additionally, the number of funds that own Humana stock is rising. It went from 2,796 in the December-ended quarter to 3,000 in September.
Additionally, Humana stock carries a good though not-yet-great 83 Composite Rating. IBD's Composite score combines five separate proprietary ratings into one. The best growth stocks have a Composite Rating of 90 or better.
Up 15% In 3 Months
Humana stock dropped to a 2023 low of 423.29 on July 13 then turned up. It gapped up 5.6% on Aug. 2 on strong earnings results. On Wednesday it closed at 485.78, up 15% from the July low. The health care stock is building a consolidation pattern with a 571.30 buy point. See if it can break out in heavy trading.
In terms of fundamentals, Humana reported a mild 2% increase in earnings last quarter, to a still-hefty $8.94 per share. It took a breather after posting EPS increases of 42%, 31% and 20% the prior three quarters. Revenue last quarter grew 13% to $26.7 billion, up from 12% growth the prior period. The company is expected to report its latest results on or around Nov. 1.
Humana stock holds the No. 2 rank among its peers in the 13-stock Medical-Managed Care industry group. UnitedHealth is No. 1 in the group, and Molina Healthcare is No. 3 among the group's highest-rated stocks.
As you try to find the best stocks to buy and watch, be sure to pay attention to relative price strength.
IBD's unique RS Rating measures market leadership by using a 1 (worst) to 99 (best) score that indicates how a stock's price performance over the last 52 weeks compares to other publicly traded companies.
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