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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Diamonds and Dogs

2/19/2013

Humana Inc. (HUM)

Humana is making investors feel sick today, down 6.46% at $72.95. The health care and insurance company saw its shares fall around $5.00 after the proposed Medicare cuts. The Centers for Medicare and Medicaid released news that they would cut reimbursement rates for insurers. Humana management said that the rate cut would be worse than expected and would greatly affected the company's revenue. Medicare and Medicaid reimbursements make up two-thirds of the Humana's revenue. In a statement, Humana management said, "Humana is closely analyzing all operational avenues available to address those preliminary rates and the related impact upon the company's ability to grow both its Medicare membership and its earnings for 2014." The company is still well above its 52-week low of $59.92.

Staples Inc. (SPLS)

Staples is watching its shares explode today, up 13.11% at $14.65. The office supply company saw shares climb higher after news of a possible merger between two of the company's rivals. Office Depot and Office Max are having talks about completing a merger. While investors of both Office Depot and Office Max could benefit from the merger, Staples investors can benefit as well. Staples stands to pick up lost sales from any store closings and any merger-related disruptions. Furthermore, if the merger is not executed well Staples could gain even more market share from the two companies. Some analysts also believe that Staples would be able to buy locations in which Office Depot and Office Max close stores. Staples is trying to reach its 52-week high of $16.93.
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