The shares of Molina Healthcare, Inc. (NYSE:MOH) touched an all-time high of $76.97 after the company reported tremendous growth in its second quarter earnings results. The healthcare service provider announced adjusted earnings per share of $0.86, a big beat against Wall Streets’ estimate of $0.66, although its revenue of $3.5 billion was slightly short of the market’s expectations of $3.6 billion. Nonetheless, Molina Healthcare, Inc. (NYSE:MOH) reported growth of 52% in its quarterly revenue on a year-over-year basis. Some of the primary reasons for the growth in quarterly results included “higher revenue, greater medical and administrative cost efficiency, and more complete state reimbursement of the Affordable Care Act Health Insurer Fee (HIF).”
While discussing the quarterly results, J. Mario Molina M.D., chief executive officer of Molina Healthcare, said, “Our second quarter results mark continued progress and momentum in our business. We were able to improve our profit margins while simultaneously growing our top-line revenue and enrollment.” Several analysts have upgraded their ratings for Molina Healthcare in the wake of the results, including Stifel Nicolaus to a “Buy” rating from “Hold”, along with a “Buy” rating from Jefferies Group.
The shares of Molina Healthcare, Inc. (NYSE:MOH) are trading up by 11.66% today, pushing their year-to-date growth of 41.79%. Smart money held a bullish outlook of the company earlier this year, as 22 hedge fund investors held $464.55 million of the company’s shares at the end of the first quarter against investments of $365.81 million from 22 investors three months earlier. Another reason for the growth in aggregate investments was the increase of 25.71% witnessed in the shares of Molina Healthcare, Inc. (NYSE:MOH) during the second quarter. Samuel Isaly’s Orbimed Advisors was the largest investor of the company in our database, with 3.46 million shares valued at $232.76 million. Israel Englander’s Millennium Management had 1.05 million shares of the Medicaid service provider in its portfolio, with a market value of $70.33 million. Ken Griffin’s Citadel Investment Group and Michael Hintze’s CQS Cayman LP were among the hedge funds holding bonds of the healthcare company in their portfolios.
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The insiders at Molina Healthcare, Inc. (NYSE:MOH) have been disposing of their shares of the company, with at least 34 insider sales transactions in 2015. The CEO, Mr. Molina, was among the major shareholders shipping off some of their shares in the company, as he sold 196,000 shares of the company in 2015. William Dentino was another insider selling shares in the company, more than 200,000 shares total in 2015.
With positive hedge fund sentiment and second quarter financial results, we recommend a long position in Molina Healthcare.
Disclosure: None
