The Motley Fool reported on five insurance stocks its advising investors to target amid the rapid consolidation in the insurance field and the uncertainty of the Affordable Care Act.
Here are the five stocks to buy:
1. Aetna (AET)
2. Anthem (ANTM)
3. Centene (CNC)
4. UnitedHealth Group (UNH)
5. Wellcare Health Plans (WCG)
The Fool's reasoning:
The Aetna-Humana and Anthem-Cigna deals are the driving forces behind the Fool's recommendation. If the either deal goes through the rest of the insurance market stands to gain valuable market shares after the acquisitions.
The Fools projects all five companies to have "solid growth," with double-digit earnings projected over the next five years.
Aetna, Anthem and UnitedHealth are recommended because of their "economies of scale and their marketing power." Although Center and Wellcare are smaller companies, their shares in Medicare and Medicaid could award them substantial competitive advantages.
The Fool recommends targeting Centene particularly because of its growth potential.
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