Anthem Inc (ANTM)

Largest US health insurer. A really well positioned company longer term. Health insurers are a part of the solution to controlling health costs because of the nature of the market. You have buyers going to suppliers and generally don’t have the information that they need. This company acts as a middle man to help get the best prices. Trading at a cheap valuation of 12X next year’s earnings. Almost 2% in dividend, which is increased every year.

Changed management a little and got a little bit more and better control of their medical costs. Was trading at a very depressed multiple of 10X earnings but is still good value at 13X earnings. 1.5% dividend yield.

He is a long term holder. It has done well. They were having management issues. But the new management team is doing a better job.

Stock has gone up, but it is still cheap because it continues to generate good value for shareholders and grow their cash flows. Because the stock is traded at such cheap valuations, they have been able to buy back a lot of their stock and reduce the share count significantly. Perfect confluence of increasing dividends, reducing share count and well-positioned to benefit in the current healthcare environment in the US.

(A Top Pick May8/13. Up 47.02%.) A year ago, this was definitely an undervalued stock trading at less than 10X earnings. Got new management in the last year. The street has started to view these types of companies a little more constructively.

(A Top Pick March 27/13. Up 58.76%.) Still really likes it and thinks there is quite a bit more to go. This is one of the solutions to the US healthcare spending problem. This is the largest healthcare insurer in the US. A great free cash flow machine.

(A Top Pick Sept 4/13. Up 4.42%.) A free cash flow machine. Expects it to continue to move upwards. Pays a dividend that will increase next year and they are buying back shares. Cheap at 10X next years earnings.

Thinks there is further upside from here. The healthcare area is one that has some opportunity because there are a lot of unknowns as to how the new legislation is going to affect these companies. His strategy is to go with the bigger ones, the ones that have scale and diversified portfolios with different offerings. Likes this because it has the Medicare but also has a strong Medicaid program. Priced well. Trading at only about 9-9.5 times earnings. Future growth should be good because of the scale it has, with 36 million members. This whole area is going to grow because of volume.

It has been held back with all of the managed care operators because of what is happening with healthcare in the US and the uncertainty. Big companies have the scale and diversification to overcome hiccups along the way. 36 million people are using this company. Expects them to make about $9 a share next year. Quite possible to see $95-$100 next year. 1.7% dividend yield.

Lumpiness in well point and others comes out of Obamacare. HMOs are going to be challenged. Longer term this is a volume issue and this one should do well. IT has been stuck here for a bit but is only at 10 times earnings and should grow over time.

Great way to play long-term rise in healthcare spending in the US. They are the leading healthcare insurer. As the Obama care get rolled out, they are well positioned to benefit. Some of the programs being rolled out present huge market opportunities. Cheap, cheap stock. A free cash flow machine. About a 2% yield and buyback stock a lot of times. His target is $105 in 12 months.

People nervous about Obamacare makes it a good entry point for this one. It has the size and scale to cope with some of the changing legislation. 2.01% yield.

(A Top Pick March 27/13. Up 13.51%.) Largest healthcare insurer in the US. US has a problem with their health care and healthcare insurance companies are part of their solution. These companies are just free cash flow machines. Still has further to go.

(A Top Pick April 18/12. Up 3.34%.) Thinks it is very well-positioned for Obama care. One of the things that he likes about it is it has scale. Bought Amerigroup which got them into the Medicaid area. Trading at only about 8.5X earnings. Management has been a little bit of an issue but they now have new management.

Leading HMO in the US. Health insurer sector has been an underperformer in the market as people are really worried about implications of changing healthcare in the US. His long-term view is this is one of the solutions for controlling healthcare costs. This company is very effective in getting the best deal for their clients. Over time, these have been great, great generators of wealth for shareholders. Trading at 8X earnings and a 2.31% dividend yield that was just increase 30% and will be increased every year. Have been buying back stock.