Anthem Inc (ANTM)

A healthcare stock. Very compelling value. Trading at 10X earnings. The US’s #2 managed care organizational health insurer. One of those good news healthcare stories. They are part of the solution of controlling the healthcare system costs. They work in ratcheting down costs for their members. The buyback on this stock has reduced its shares outstanding by 58% in the last 9 years. Dividend yield of 2%.

(A Top Pick April 7/15. Down 3.3%.) The #2 healthcare insurer in the US. In the long term, this has been a great performer. Really cheap and has been one of the beneficiaries of Obama care, as well as general healthcare trends. They help the consumer get best healthcare value. Dividend yield of 2% that grows every year. Still a Buy.

One of the 2 biggest health insurers in the US. A great business that has done really well. Stock has pulled back despite the earnings. The dividend continues to grow. Trading at 11X this year’s earnings and 10X next year’s. This is a Buy Back machine having reduced shares outstanding by 57% in the last 9 years. Dividend yield of 1.97%.

Healthcare company and insurer of 40 million American lives. Most business is from commercial and government. He likes it very much. There will be some dislocation from the affordable care act. You skate through it with large companies with scale.

One of the largest healthcare insurers in the US. Have close to 40 million Americans insured. Feels the stock has suffered because of the total malaise that healthcare is feeling, and the uncertainty of the healthcare reform that we have seen over the last couple of years. Their teething problems will get sorted out. The important thing is that the wind is at their back, because more and more people need to be insured and will be, and are getting older and will need insurance and healthcare.

A very large US insurer, Blue Cross and Blue Shield. They ensure about 37-38 million Americans. This has come down with the whole healthcare area through the summer, and he thinks there are opportunities selectively in health care. Trading at about 13X this year’s earnings. Dividend yield of 1.85%.

(Top Pick Sep 10/14, Up 26.84%) These are pretty good businesses. With the increased involvement in Medicaid and Medicare, part of the way they reduce costs is to consolidate. The acquisitions in the sector are accretive for shareholders.

This is an insurer and insures about 40 million Americans. If you were going into this area he would go big because they have scale. The operating leverage of that kind of model is very, very positive. Trading at about 14X earnings.

(A Top Pick June 16/14. Up 56.11%.) One of the US’s largest healthcare insurers. A free cash flow story and a great, great business. One of the solutions to the high healthcare spending in the US. They do all the negotiating with the doctors, hospitals, etc. Have used their free cash flow to buy back a lot of stock, but also now recently to pay dividends. Thinks it is going higher. This is a great holding.

Healthcare is a great place to complement a portfolio and an obvious place to hedge against the US$ fluctuations. This one is a very, very large insurer. Somewhere around 40 million Americans in the healthcare area. It is a growth area because of the healthcare reform. Public sign-ups are increasing. Recently reported some very strong numbers.

The biggest healthcare insurance provider. A great play on helping the US control healthcare costs. Medical expenses are probably one of the biggest expenditure in the US. Historically, have done a great job for the customers as well as for their shareholders. Producing ever increasing streams of earnings and cash flows. Probably trading at the upper end of its historical PE, but he feels people are starting to realize the quality of these businesses. Trading at 14 X next year’s earnings. In the last 8 years, it has gone from 627 million shares outstanding to about 280 million because of share buyback. Yield of 1.61%.

Very well-managed. The multiple on the stock has gone from 8 or 9 times earnings up to around 14 times earnings. Still not expensive. Have gained great control of their medical/loss ratio. A very large insurer of close to 40 million Americans and tied in through Blue Cross.

Not the inexpensive stock that it was before. Have done good things and have been rewarded. He still owns but is very aware that maybe there is more risk today than there was previously. This is one that you don’t just put away, but you continue to watch it.

(A Past Pick Nov 13/13. Up 45.93%.) At the time, this was trading at well under 10X earnings. They had new management that was showing positive signals. Also, Obama care was on the horizon with a very cloudy future. Company is doing very well. This is now going to have to rely on organic growth.

You have to look at the implications of the affordable health care act. There are some risks, but they create opportunities. US insurers have that critical mass so when they win in one area it more than offsets another area. A greater and greater number of people are now able to be insured. They are doing well and the demographics are in favour of these companies.