HEALTH CARE STOCKS: Are Prices About To Head Up?
The Wall Street Journal reports that executives at several leading health care firms are quietly acquiring shares in their companies, an indication that stock prices may climb after losing value for much of the past year. The Federal Filings Business News found that "[n]et buying" by the "officers and directors of health care providers has picked up substantially," with $9.1 million in net purchases recorded in August, up from $478,000 in July. Examples of buying by company insiders include: Oxford Health Plans CEO Norman Payson, who "bought two million shares of the ... firm between Aug. 19 and Sept. 8 at prices ranging from $6 to $7 apiece"; and six Foundation Health executives, who "bought 60,700 shares at $11 to $12 a share from Aug. 20 to Aug. 31." According to the Journal, "[a]nalysts are upbeat." Prudential Securities Inc.'s Frank Ponticello said, "These stocks are down substantially and in some cases are worth taking a look at, as value players and bargain hunters are beginning to circle the wagons." Buying by company insiders is "an indication that people feel strongly about their companies and/or the industry in general," said Coventry Health Care CFO Dale Wolf, who recently bought 15,000 shares in his company. Vickers Weekly Insider newsletter editor Richard Cuneo said, "In general, our experience has shown that when stocks are beaten down you will see one or two people jump in. But when you see an industry movement like this, it tends to show that people across the board are looking for industry conditions to improve" (Egodigwe, 9/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.