Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Cigna Corporation (NYSE: CI) have lost 10% of their value today after the health insurer disappointed Wall Street with its fourth-quarter earnings report.
So what: Cigna's fourth-quarter revenue came in at $8.15 billion, a 7% year-over-year improvement and better than the $8.05 billion Wall Street consensus. However, Cigna's adjusted earnings of $1.39 per share were worse than the $1.49 in EPS analysts had expected (GAAP EPS was $1.29), and the company's guidance for 2014 now looks worse: While analysts had modeled Cigna's full-year EPS at $7.32, the company offered a range of $6.80 to $7.20 per share.
Now what: Obamacare's impact has yet to be fully felt on the health insurance industry's bottom line, but if this report is any indication, that impact won't be a good one. Shares of other insurers are also feeling the pain today as investors come to grips with the likelihood of higher medical costs -- Cigna highlighted higher-than-expected costs in its private Medicare business as a reason for the profit drag.
Today's drop shouldn't scare long-term investors away, but there might be better insurers out there for your investment dollars. Don't jump in before you assess Cigna's value relative to its peers.
Want more news and updates? Add Cigna to your Watchlist now.
Don't settle for slow growth...
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.