Tom Reese/Paul Rubillo, Dividend.com
Shares of Humana Inc. (HUM) are dropping over 19% in early trading as the company voices concerns about the U.S. government's proposed payment rates for Medicare plans in 2010.
The company warned the rate increases would have a significant adverse impact on 2010 premiums and benefits for seniors if they become final. The fallout could be a cut in benefits to members if the company is to maintain its current profit margins. With the space already being competitive, there is potential risk to members looking elsewhere for coverage.
The Bottom Line
Shares of HUM have technical support at the $29 level. If that level fails to hold, we could see the $22-24 levels. If the shares are able to bounce back, we see overhead resistance at the $49-51 level. We do not currently rate this non-dividend paying stock, but we do follow the stock as a gauge for health care services industry.
Humana (HUM) does not currently pay a dividend.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
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