Sunday, November 05, 2006

Sierra Health in the bargain bin

A while ago I had written that Aetna was in the bargain bin, after announcing some disappointing results. I did buy in at that point, and am enjoying the rapid gains since then.

A similar thing had happened earlier with Molina (MOH), and I am still holding onto my shares bought cheaply then.

This time around another sector player is in the bargain bin - Sierra Health Services (SIE). I have mentioned Sierra as a takeover target earlier in this post on the Pacificare acquisition.

At around $32/share today, Sierra is trading at substantial discount to a takeout price, which I expect to be in the $44-50 range. The most likely buyer - Aetna.


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