Zacks Bull and Bear of the Day Highlights: Haemonetics, Iron Mountain, Aetna
Inc., UnitedHealth Group Inc. and CIGNA Corp.
CHICAGO, Jan. 14, 2013
CHICAGO, Jan. 14, 2013 /PRNewswire/ --Zacks Equity Research highlights
Haemonetics (NYSE:HAE) as the Bull of the Day and Iron Mountain (NYSE: IRM) as
the Bear of the Day. In addition, Zacks Equity Research provides analysis
ontheAetna Inc. (AET), UnitedHealth Group Inc. (UNH) and CIGNA Corp. (CI).
Here is a synopsis of all five stocks:
Bull of the Day:
2013 is considered a landmark year for Haemonetics (HAE) based on several key
growth factors, including entry in the $1.2 billion whole blood collection
market with the acquisition of the transfusion medicine business of Pall Corp.
We are also optimistic about the expected limited market release of the
paperless phlebotomy offering by the end of the fiscal fourth quarter.
We believe deeper penetration of IMPACT accounts and the growth in the Plasma
business should drive sales going forward. Haemonetics focus on emerging
markets is yielding results and China continues to record strong growth.
Revenue from this region is expected to accelerate over the forthcoming
We thus upgrade the stock to Outperform. Our target price is based on 29.6x
our 2013 EPS estimate of $1.69.
Bear of the Day:
Iron Mountain (IRM) reported a dismal third quarter negatively impacted by
lower-than-expected organic growth in the core services coupled with
contraction in activity-based service revenue and decline in recycled paper
prices. The company provided a tepid outlook.
Although the company's decision to convert into an REIT would definitely
increase shareholders value and reduce the tax burden, we continue to believe
that the results will be negatively affected by sluggish internal growth,
volatile foreign exchange rates and a decline in recycled paper prices. Iron
Mountain has a strong product portfolio, which is helping it to expand into
However, we believe that this will not be enough to drive significant growth
over the long term. Thus, we have downgraded the stock from Neutral to
Underperform and set a price target of $28.00.
Aetna Partners BTP, Forms ACO
U.S. health insurer Aetna Inc. (AET) has agreed to form an Accountable Care
Organization ("ACO") with Brown & Toland Physicians ("BTP"). This is in sync
with the company's effort to improve the safety and quality of patient care
and make health care more affordable.
The newly formed ACO will serve Aetna's members who are enrolled in preferred
provider organization ("PPO") and Managed Choice ("MC") plan. It will also
cover those who receive care from Brown & Toland primary care doctors.
Brown & Toland doctors will receive remuneration based on their performance in
reducing patient health care costs while providing them best service.
An ACO is a collaboration of health care providers who voluntarily form
alliances to provide coordinated high quality care to patients. An ACO is
accountable for the quality, cost, and overall care offered to members. By
focusing on the needs of patients and linking payments to outcomes, the model
is intended to improve the health of individuals and communities and curb
rising health care costs.
ACOs or collaborative accountable care is one of the several ways by which
President Obama wants to improve the quality of health of all Americans. It is
viewed as a tool that would deliver seamless, high quality care for the
The Health Care Reform called for such an arrangement in order to trim
unnecessary expenses associated with the absence of coordination between
multiple physicians and other providers. Most Americans with multiple chronic
conditions receive care from multiple physicians, and it has been observed
that few patients were not taken care of to the fullest extent possible by
some physicians. A large percentage of the sick population ended up being
victims of medical errors and faced hospital readmissions within days of their
discharge. Thus, ACOs were formed to reduce the exorbitant amounts spent due
to lack of managed care.
Other health insuring giants like UnitedHealth Group Inc. (UNH) and CIGNA
Corp. (CI) are also aggressively forming ACOs. Going forward, we expect such
patient-centered collaborations to rapidly grow in numbers.
Aetna currently retains a Zacks Rank #3 (Hold). We are also maintaining our
long-term Neutral recommendation on the shares.
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