COMPANY DESCRIPTION
Anthem is a mutual insurance company that provides managed health care, insurance and government program administration services in the US. It also provides claims processing, actuarial services, and medical cost management services. The company is headquartered in Indianapolis, Indiana and has about 20,000 employees.
ECONOMIC MOAT
Anthem’s economic moat has been built by the company’s ability to build a sizable membership base and solid provider network. ANTM participates in 14 states under the Blue Cross/Blue Shield brand, which gives it unparalleled recognition among members.
OUTLOOK
Anthem boosted its dividend distribution. The company grew its quarterly payout by more than 40% to begin 2015, to $0.625 per share. ANTM maintains its expectation that 2015 earnings can eclipse $9.30 per share. Barring any big surprises, membership trends and maintained share repurchases should help the bottom line tick up to $9.45 per share in 2015.
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STRENGTHS
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Strong growth in revenues
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Strong technology focus
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Strong brand association
WEAKNESSES
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Market concentration
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Lower productivity
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Concentration of fixed-income securities in investment portfolio
THREATS
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Intense competition
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Little opportunity for inorganic growth
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Government regulation
OPPORTUNITIES
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Decline in the unemployment rate
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Anticipated increase in average HMO rate
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Proposed merger with WellPoint Health Networks
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The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.
