Humana Posts Highest-Ever Share Price Following Kindred, Curo Deals

Insurance giant Humana (NYSE: HUM) now officially owns a stake in the nation’s largest home health and hospice provider, and investors appear to be excited by this development.

Humana’s share price hit its highest-ever peak last Thursday, trading at $319.44, according to Yahoo Finance data. The Louisville-based company’s moves into the home health and hospice space can be credited, according to Ana Gupte, health care services managing director and senior research analyst with Leerink Partners LLC.

“Humana’s leadership on integrating home health care into its operations is a game-changer,” she told reporter Chris Larson, in an interview for Louisville Business First.

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Specifically, investors seem to believe that Humana will be able to better manage costs for its large population of Medicare Advantage beneficiaries, she said. This was a key argument that the insurer put forward to explain its $800 million purchase of Kindred at Home, the home health arm of Louisville-based post-acute giant Kindred Healthcare.

Robert Holly for AMN
Humana Share Price YTD

Private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe own the remaining 60% of the company, but Humana has an option to wholly acquire it in the future, which it has indicated it will likely exercise.

Humana and the PE firms also acquired major hospice provider Curo in a subsequent deal, and are combining that company with Kindred at Home to build out end-of-life care capabilities.

Recent chatter that retail behemoth Wal-Mart might buy Humana has been quelled, in part by news that the insurer is moving forward on a pilot with pharmacy company Walgreens Boots Alliance, Gupte told Larson. That pilot will involve Humana operating some senior-focused clinics at Walgreens stores.

And, looking to the big picture, investors also are well aware of the aging U.S. population, which will vastly increase the market for senior-focused health care and insurance products in the coming years and decades, Gupte said.

Humana shares were trading at $313.35 as of mid-afternoon Tuesday.

Written by Tim Mullaney