Citi Comments On Universal American Trading Below Net Cash Held On Balance Sheet

In a report published by Citi, Universal American UAM is the only stock in the managed care group trading below the net cash held on the balance sheet.

Citi said that Pro forma tangible book value at year end was nearly $10 per share, better than the $8 it expected. “With $10 in tangible book value, and CVS paying $13 for the Medicare drug business, Universal should trade for at least $23, even if the market puts no value on the company's earnings stream. Our price target rises to $23, upside of nearly 30% after adjusting for the CVS deal.”

Universal American closed yesterday at $20.92.