The Zacks Analyst Blog Highlights:Hilltop Holdings, Homeowners Choice, HCC Insurance Holdings, athenahealth and Epocrates

  The Zacks Analyst Blog Highlights:Hilltop Holdings, Homeowners Choice, HCC
                Insurance Holdings, athenahealth and Epocrates

PR Newswire

CHICAGO, Jan. 10, 2013

CHICAGO, Jan. 10, 2013 /PRNewswire/ announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Hilltop Holdings Inc. (NYSE:HTH),
Homeowners Choice Inc. (NYSE:HCI), HCC Insurance Holdings Inc. (NYSE:HCC),
athenahealth Inc. (Nasdaq:ATHN) and Epocrates Inc. (Nasdaq:EPOC).


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Here are highlights from Wednesday's Analyst Blog:

Hilltop Upped to Outperform

On January 9, we upgraded Hilltop Holdings Inc. (NYSE:HTH) to Outperform from
Neutral based on the recent PlainsCapital acquisition. This property-casualty
(P&C) insurer secured a Zacks Rank #1 (Strong Buy) shortly after closing the
acquisition last month.

Why the Upgrade?

Hilltop's third-quarter 2012 loss came in at 7 cents a share, well below the
Zacks Consensus Estimate of earnings of 1 cent per share. The company
broke-even in the year-ago quarter. Revenues climbed 5.5% year over year to
$42.8 million, also breezing past the Zacks Consensus Estimate of $42.0
million. Over the past four quarters, Hilltop has delivered an average
negative surprise of 437.5%.

Following the release of the third quarter results, the Zacks Consensus
Estimate of a loss for 2012 has gone up 31.3% to 21 cents per share. However,
the Zacks Consensus Estimate for 2013 earnings grew 5.0% to $1.25 per share,
reflecting a positive outlook post PlainsCapital acquisition.

Hilltop's growth story appears gripping, particularly, after it completed the
acquisition of the U.S.-based financial services company – PlainsCapital Corp.
– for about $700 million,on December 3.The acquisition is consistent with
Hilltop's growth goals and will help it fortify the company's market position
in the primary operating markets of Texas, Oklahoma, Georgia, Tennessee and

The acquisition is set to help Hilltop diversify its operations from core P&C
insurance to profitable banking operation. PlainsCapital is a highly lucrative
$1 billion banking entity that benefits from the ongoing low interest rate
environment and the refining housing sector, as these factors provide
promising opportunities for investors to park their funds in such high-quality

As expected, Hilltop witnessed an immediate ascent in its market price
following the successful culmination of the acquisition. A stable ratings
outlook and a share buyback program further raise shareholders' confidence.

Other Stocks to Consider

Besides Hilltop, other stocks in the P&C sector that are currently performing
well include Homeowners Choice Inc. (NYSE:HCI) and HCC Insurance Holdings Inc.
(NYSE:HCC). Both the companies carry a Zacks Rank #1 (Strong Buy).

Athenahealth to Buy Epocrates

Recently, athenahealth Inc. (Nasdaq:ATHN), a provider of cloud-based services
for physician practices and inpatient settings, inked a definitive agreement
to acquire Epocrates Inc. (Nasdaq:EPOC) for about $293 million in cash. The
aggregate purchase price is based on a price of $11.75 per share, which
reflects a 22% premium over the closing price of Epocrates on January 4, 2013.

athenahealth plans to fund the acquisition with available cash and available
borrowing capacity from its existing credit facility. Exiting the third
quarter, the company had cash and cash equivalents and short-term investments
of $180.2 million, up 52.1% year over year, with no outstanding debt.

The Acquiree

Epocrates is a provider of point-of-care digital solutions in the healthcare
industry. Its portfolio consists of well-regarded medical applications, which
are currently available on major U.S. mobile platforms. The company launched
its mobile and web-based electronic health record (EHR) solutions in July
2011. Epocrates reported revenues of $113.3 million in 2011, up 9% year over

Stockholders at Epocrates (accounting for 17.5% of the company's outstanding
common stock) have expressed that they are in favor of the transaction. The
acquisition is expected to close in the second quarter of 2013, subject to
standard closing conditions.

Benefit of the Acquisition

The acquisition will enable athenahealth to increase its user network as
Epocrates currently serves over a million healthcare professionals, including
330,000 physicians in the U.S. Further, the buyout will enhance brand
awareness for athenahealth as Epocrates is recognized by 90% of physicians in
the U.S.

Given the widespread mobile user base of Epocrates, athenahealth is expected
to improve efficiency of new mobile workflows. Moreover, the mobile expertise
of Epocrates in conjunction with athenahealth's cloud-based network should
enable the latter to commercialize novel mobile applications.

We believe that the acquisition is part of the company's strategy to expand
beyond the current cloud-based services – athenahealth's mainstay. We are
optimistic about the company gaining a competitive edge over industry
stalwarts, following the acquisition.

In addition, the acquisition is expected to improve athenahealth's access to
small group physician practices with Epocrates' credible client base. The
buyout might offset the trend toward consolidation of small physician group
practices, which is a potential negative factor for athenahealth. This
presents a solid growth opportunity in the near-term.

Deal Under Scrutiny

Following its recent announcement, the agreement has been subjected to legal
scrutiny. The deal is currently entangled in lawsuits as law firms assert that
the agreement does not uphold the interest of Epocrates' stockholders. This
stems from their belief that athenahealth is underpaying for the acquisition.

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