Should I Buy Humana (HUM)? Finance YouTuber Analysis

The analyst is selling Humana, despite being near break-even and believing there's untapped value with solid 10% revenue growth and a cheap 0.25x price-to-sales. He cites the political sensitivity of health insurers, especially with upcoming midterm elections, as a limiting factor for returns. He opts to take profits and reallocate funds to investments with higher growth potential.

“But health insurers are just too much of a political football which may limit their returns going into these midterm elections. So, I'm going to take profits here and reallocate the money where it can grow faster.”

The analyst recommends Humana, noting it's down 14% over the last year. He believes it's now in 'value territory' and is starting to look attractive, positioning it as a safety stock within the healthcare sector during a market correction.

“You can look at United Health Group, the UNH, uh the HUM, Humanana that we've been following all year. Those have started to look good over just over the last uh over the last 3 months. Those are up, but they're still down huge over the last year. Down 48% for United Healthcare there. So, I think this is the time to start to start buying those stocks in that value territory on their way up.”

The YouTuber identifies Humana as a favored stock in the Medicare Advantage space within the healthcare sector, which he recommends for its defensive qualities during market volatility. He suggests that healthcare stocks, including Humana, are trading at attractive valuations and can help protect capital if the market sell-off worsens.

“Another one of my favorite stocks, Medicare Advantage stocks there, Humanana, ticker HUM.”

The YouTuber suggests Humana as a buy within the healthcare sector, which he identifies as trading at a discount to its long-term valuation and having a 20% upside to analyst price targets.

“In healthcare, that means names like United Health Group and Humanana, Eli Liy and Medronic.”

The YouTuber suggests Humana as a potential turnaround play in the healthcare insurance space. Despite industry headwinds, Humana is managing better than Centene, posting positive operating profitability, reporting 10% revenue growth, and raising its full-year outlook, trading at a steep discount to its historical average.

“Shares trade here for just 0.24 times on a price to sales valuation. A steep discount to its historical average.”

The analyst views Humana as a 'rebound stock' with strong upside potential, noting its current cheap valuation at 27 times price-to-sales, a 48% discount to fair value. He points to a favorable regulatory environment for Medicare Advantage carriers, with announced reimbursement rate increases, despite potential earnings volatility.

“For that, Humanana continues to be one of my favorite rebound stocks for the year. Strong upside potential and less volatile than the rest of the market.”

The analyst views Humana as a good long-term stock despite a recent crash due to competitor news. He notes that the government recently increased reimbursement rates for Medicare Advantage plans, which should positively impact Humana. He anticipates more favorable regulatory news, suggesting the stock will recover and move higher.

“Last week's news comes less than 2 weeks from news that the government would increase reimbursement rates for MA plans by 5%, more than double the rate previously announced. News that sent the shares up 11% in a single day.”

The YouTuber recommends Humana due to potential changes in Medicare Advantage regulations under a new administration, which could favor MA plans. Humana is the second-largest provider in this market and has shown strong enrollment growth. The stock is considered undervalued at 4 times price-to-sales, with a potential upside to $400 per share.

“Humanana was on my turnaround list to begin the year on potential changes to Medicare and the Medicare Advantage programs.”

The analyst prefers Humana over United Health Group in the Medicare Advantage space, noting that Humana trades at a significantly lower price-to-sales multiple (0.3x) compared to UNH (1.4x). Despite recent policy headwinds, the sector is seeing increased reimbursements, and Humana offers a more attractive valuation.

“While I like Humanana, ticker HUM better in the Medicare Advantage space. We've also highlighted UNH over the last few months.”

Humana is recommended as a relatively tariff-immune, service-based business in a staple industry. It is the second-largest provider of Medicare Advantage programs, with strong enrollment growth and expected revenue increases. The stock is considered undervalued based on its price-to-sales ratio.

“Humana is the second largest provider of Medicare Advantage programs with an 18% market share and books strong growth of $472,000 enroles last year, an increase of about 8.5% over the previous year. Unexpected growth of 6% to $125 billion in revenue this year. It's terrifically undervalued at just 0.27 times trailing sales, a discount of at least 48% from that longerterm price to sales ratio average.”

The YouTuber indicates that Humana could perform well if there are future changes favoring Medicare Advantage plans. This conditional buy signal is based on potential policy shifts that would benefit the company.

“Ure a human ha ticker hm could also do very well if we see changes favoring Medicare Advantage plans over the next few years”

The YouTuber expresses high conviction for Humana, citing its significant drop (down 48% this year) and attractive valuation at 13 times forward earnings. He believes the Medicare Advantage sector, where Humana holds a large market share, will see policy tailwinds from a new administration, offering limited downside and substantial upside potential.

“human is actually down 48% this year the sixth worst stock in the S&P 500 SO trading at very attractive valuations just 13 times on a price to forward basis so I think if you are worried about some kind of a pullback in the in the uh the gross stocks and in the rest of the market here you've got a part of the market in these in these Medicare Advantage insures that is already very attractively priced has a limited downside but then that upside to uh to headlines”

The YouTuber recommends Humana, citing its potential for a significant turnaround in 2025, especially under a new administration. He believes that a Trump presidency, with a focus on Medicare Advantage, would reverse the Biden administration's attempts to shrink participation, benefiting Humana as the second-largest provider with strong enrollment growth and broad county coverage.

“not only do we have that upside potential on any headline changes to Medicare Advantage Programs but there's also a lot of value in the stock for the longer term return”

The YouTuber identifies Humana as his highest conviction pick, having recently invested $85,000. He highlights its position as the second-largest Medicare Advantage provider with strong enrollment growth and extensive county coverage. Despite being one of the worst-performing stocks, he believes analysts are underestimating its potential for a significant rebound with anticipated policy changes.

“My pick for the highest upside in the theme is human Inc ticker hm up 12% on the election news alone and one of the few to trade higher still.”

The YouTuber bought Humana shares, expecting it to benefit from changes to the Medicare Advantage program and a potential recalculation of its CMS star ratings. A recent federal judge's order for United Health's rating recalculation suggests Humana's rating could also be revised upwards, which would increase its reimbursement rates and provide significant upside.

“not only is the company the best position position to benefit from changes to the Medicare Advantage program and a trump Administration stance on Healthcare spending the center for Medicare and Medicaid services of the CMS is being forced to recalculate some of its star ratings for several insurers the star ratings help determine how much an insurer is reimbursed for providing Medicare Advantage Services the CMS released new ratings in October but was sued by several provider provider insurers including human last month a federal judge ordered the CMS to recalculate United Health's rating when it was ruled that the government had unfairly assessed the insurers call center service the ruling is a good sign that humanas rating could be recalculated as well adding to that upside that I'm expecting from those those broader Medicare Advantage changes over the next year”

Humana is identified as a major beneficiary of a potential shift in Medicare Advantage policy under a new Trump administration, which is expected to favor growth in government-sponsored insurance programs. The stock has already seen a post-election bump, but significant further upside is anticipated as new policies roll out.

“human ticker hm could be the biggest beneficiary within the most underestimated change with the incoming Trump Administration whereas President Biden focused his term on increasing regulation and lowering government payments to the Medicare Advantage Programs president-elect Trump campaigned on growing membership to the government sponsored Insurance along with talking it up as an alternative to government Healthcare now Dr Meed Oz Trump's nominee to run the centers for Medicare and Medicaid services the CMS which oversees one of the largest budgets in the federal government including those Medicare Advantage payments he's also been a vocal supporter of ma on his talk show as well as during his Run for the Senate a Humana as the most play stock in that Medicare Advantage theme is up 16% since the election but that's nothing compared to the potential as these plans for change start rolling out early next year even with the post-election bump shares of human are still down 12% Over The Last 5 Years encompassing that Biden Administration”