Aetna Becomes Obamacare Dropout; Warren Buffet Takes a Big Bite Out of (the) Apple; TJX: Don’t Discount the Discounter

See ya!

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

In case it wasn’t entirely clear how some big insurance companies feel about Obamacare, perhaps Aetna might shed some light for you. The healthcare insurer is dropping out of the exchange in 69% of its counties. It’s dropping out of 11 of 15 states after eating $200 million in pre-tax losses during its 2Q. Of the 838,000 Affordable Care Act policies it has, 20% will be adversely affected. Aetna, which is the nation’s third largest insurer, isn’t the first health insurance company to do this. United Healthcare Group already dropped out of Obamacare exchanges and as did Kaiser, with more expected to follow. Whichever side you fall on in terms of the Obamacare debate matters not. It’s arithmetic that’s at play here. Aetna argues that they were losing big money to make the Obamacare policies work. Not enough healthy people were signing up and too many unhealthy people were. The premiums that healthy folks pay were/are intended to offset the large cost of the the unhealthy. Unfortunatey, things didn’t work out that way. The Departement of Health and Human Services was supposed to figure out ways to fix that issue. While its says it did, insurers say it didn’t – or at least, not enough. If you’re really bent on having Aetna insure you and your state’s just been dropped by it, you might want to consider moving to Delaware, Iowa, Nebraska and Virginia. Those states will still be offering policies from Aetna in 2017. Well, at least for now they will be.

Well, if Warren Buffet’s Doing it…

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Berkshire Hathaway’s very own oracle is taking a much bigger chunk out of the not-so-proverbial apple – the one based in Cupertino, that is. Warren Buffet upped his stake in the tech company by a substantial 55%. That’s in direct contrast to his fellow billionaire’s recent actions. George Soros just chucked his Apple stake out the window over concerns in China, or rather concerns about China’s policies regarding the iPhone maker. However, there’s a chance he’ll re-invest down the road. Activist investor billionaire Carl Icahn also ditched his Apple shares back in June. When he did this, shares of Apple had taken a slight dip, at which point Warren Buffet swooped in and increased his stake. Now his total stake of 15. 2 million shares is valued at about $1.7 billion. Shares of Apple, by the way, are up 14% since June. Incidentally, Wal-Mart didn’t fare so well as far as Berkshire Hathaway’s portfolio is concerned. The Oracle of Omaha cut Berkshire Hathaway’s stake in the world’s largest retailer by 27%, keeping it at just over 40.2 million shares. But Warren Buffet has had Wal-Mart in its portfolio a decade now and while his stake might be reduced, it’s probably still not going anywhere. For now. Curious what else Berkshire Hathaway has sitting in its very lucrative portfolio? Coca Cola, American Express, Johnson & Johnson, Kraft Heinz, Wells Fargo…to name but a few.

Who you calling off-price?

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Macy’s and friends might be bemoaning the state of the retail landscape. But they won’t get much sympathy from discount retailers T.J. Maxx. Its parent company TJX Cos came out with its second quarter sales results that had the retailer beating predictions.  But all was not perfect from the company that also owns Marshall’s and HomeGoods. It put out a bit of a bleaker picture for its third quarter that caused shares to fall today, despite its stellar performance.  In all fairness, that depressing and most unimpressive outlook is primarily because TJX Cos is waging war against a strong dollar. Besides, the company is giving out wage increases, so its hard to be mad at a company whose fiscal prowess is taking a hit for a very noble cause. There is even a silver lining – the company is turning out to be a big draw, luring shoppers away from malls with its deeply discounted merchandise on major name brands. Profit for TJX Cos was $562.2 million with 84 cents added to shares, while analysts only predicted 80 cents per share.  A year ago at this time, the company picked up $549.3 million with 80 cents added to shares. The stock is up 17% since January.

 

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Fitbit Fit to be Publicly Traded?; It’s All About the Vice for Dollar General; Start Saving, Health Insurance is on the Rise. Again

Working up a sweat…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

You may not own a Fitbit (yet) but perhaps you might be interested in owning shares of the company instead. The fitness monitoring device, which collects data on how much exercise you do – and don’t do – along with how much sleep you get – and don’t get – is now looking to fiscally beef itself up for some IPO action. The company, started by James Park and Eric Friedman, already pulled down $745 million in revenue and $100 million just last year. Fitbit is looking to raise $478 million to put out 29.85 million shares that might just fetch somewhere between $14 – $16 per share. That ought to give Fitbit a hefty $3.3 billion valuation. Of course, with any IPO, Fitbit has its share of detractors who are eager to point out the oodles of competition from, among others, Apple’s Smartwatch, Samsung and Jawbone.  The other issues that have investors skeptical is the tendency of fitness device wearers to ditch the “bits” within months, though I am not pointing any fingers, if only because I don’t have enough. Research found that a third of fitness device wearers ditch them within six months of getting them. Too bad you’ll have to wait until June 17 to find out the exact IPO price. But at least it gives you some time to start saving up.

Can I get a light?

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Dollar General sells a lot of useful stuff for dirt cheap and who doesn’t like that. But it was the not so useful stuff that helped the chain boost its sales this quarter. And by “not useful” I am actually referring to a little category dubbed “vice spending.” Yes, sales from tobacco and candy generated a greater portion of sales, in addition to its less vice-ful, or vice-free merchandise. Dollar General managed to rake in $4.92 billion in revenue. While that number just barely missed expectations, Wall Street didn’t seem to mind as it was still an almost 9% increase over last year and and that came with a very satisfactory profit of $253.2 million adding 84 cents per share. Analysts only expected 82 cents per share, by the way.  Even though same store sales grew 3.7% as opposed to the 4.1% expected by analysts, Wall Street still wasn’t upset and instead sent the stock up about 5%. Apparently, the stores were still seeing a lot more traffic i.e. customers who were shelling out a lot more cash. And if “vice” spending takes the credit for that, then so be it.

Stick out your tongue and say argh…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

If the cost of your health insurance doesn’t suck enough, then get ready for 2016. Many many many health insurance companies have big expensive plans to ask state regulators to allow them to hike premiums on individual policies, whether they’re on the Obamacare exchange or not. We’re talking double digit increases. Apparently, these companies didn’t anticipate an increase in the amount of people going for doctor’s visits and getting prescriptions filled. Which is kind of weird because, don’t insurance companies pay people big salaries to anticipate such expenses? Just asking. Even though insurance commissioners and regulators can deny insurance companies their proposed rate hikes, it’s likely they’ll get approved for some type of increase, just maybe not as much as the insurers would have liked. So maybe you should start saving up to pay for your health insurance rate hike instead of those Fitbit shares.

Anthem Hits a Sour Note With Major Cyber Attack; Under Armour’s Over the Moon Ratings; Sony Executive Amy Pascal Down But Not Out

Cyber-sickening…

Image courtesy of chanpipat/FreeDigitalPhotos.net

Image courtesy of chanpipat/FreeDigitalPhotos.net

Anthem now joins the illustrious list of major companies to get cyber-hacked, although the health insurance company has yet to definitively say how many of its 80 million current and former customers are affected. It can definitively be said that all sorts of personal information was taken, including social security numbers, names, birthdays, employment data etc. – the kinds of details that can facilitate a very rude and inconvenient identity theft. Anthem says no credit card information was taken. Just everything else of significance. Customers can expect to be notified if they haven’t already been, and in keeping with corporate-cyber-attack tradition, affected customers will also get free credit monitoring and identity protection.  Anthem, which just happens to be the second largest health insurance company, with Anthem Blue Cross, Anthem Blue Shield, Amerigroup and Healthlink under its wings, just might earn itself the uncoveted distinction of having suffered the largest data breach in the health care industry. Ever. However, it’s still looking to sign up new customers for that pesky February 15 Obamacare deadline. Naturally the Feds are involved and if it’s suspected that information was stolen, the FBI has graciously established the Internet Crime Complaint Center website: www.ic3.gov. Anthem also wanted everyone to know that the data of its associates was also breached if that’s at all reassuring, though I don’t know why it would be. Now go and change your passwords!

Bringing it on…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Don’t you just love a good athletic apparel smackdown? Today’s  smackdown is brought to you by Under Armour and its CEO Kevin Plank, who not so graciously told Nike and Adidas to get used to being number two during a CNBC interview. Charming, right? But after posting some boffo earnings that boasted 31% revenue growth to $895 million, I guess he earned the right to say that. Except that Under Armour is, in fact, currently the number two fitness apparel maker, behind Nike. Just saying. In any case, CEO Kevin Plank’s numbers were no accident. The company’s profits were up 37% to $88 million coming out to $0.40 per share. That, my virtual pals, was one cent more than what analysts predicted. Plank’s fiscal logic for Under Armour is pure fitness genius: The more people exercise, the more exercise apparel they’ll need. To add to its fitness arsenal, Under Armour picked up not one, but two calorie-counting, fitness-tracking apps: MyFitnessPal for the very robust price of $475 million and Denmark-based Endomondo, for a cool $85 million. MyFitnessPal currently has 80 million users with Endomondo coming in at 20 million users, mostly in Europe, and with those two acquisitions under its svelte belt, Under Armour hopes to become “the world’s largest digital health and fitness community.” How nifty.

Hack Attack Comeback…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Sony Pictures Entertainment studio head Amy Pascal may be stepping down from her cushy spot at the top, but she’s not out of the picture. The executive, whose emails figured prominently in the Sony hack attack in December, if only because she made some racist comments about President Obama and called Angelina Jolie a spoiled brat (though she did say sorry), will now get a four year production deal with Sony.  While it’s safe to assume she won’t be working with Jolie, or Adam Sandler, or the President for that matter, she will get distribution rights to the the films she does. Not bad for someone who put her foot in her mouth, via email, subsequently earning herself some of the biggest A-list enemies imaginable. The movie “The Interview,” starring the cuddly duo of Seth Rogen and James Franco, was allegedly the source for all the hacking misery, as it poked fun at North Korean dictator Kim Jong Un. The scandal cost Sony $15 million which coincidentally is the same amount of money the “The Interview” made from 2 million digital downloads – in its first few days of its release.

Can You Afford Not to Care? Gettin Riggy With It and McCoffee=McFree

Do you even (Obama) care?

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Image courtesy of koratmember/FreeDigitalPhotos.net

In case you haven’t heard, though judging by the media bombardment I don’t know how that would even be possible, today is the very last day to sign up for open enrollment of Obamacare…whoops! I meant affordable health care on Healthcare.gov. It should be duly noted, however, that after passing the Affordable Care Act, I have yet to speak to anyone who finds their health care remotely affordable. If you’re just now getting around to it then good luck. You’re going to need it. Earlier today the site was down for almost four hours. Fraught with a variety of glitches, Healthcare.gov enrollees encountered a “virtual waiting room” while others were told to leave their email addresses and would get “invited back” to enroll. I couldn’t make this up if I tried. Then there were lots more who couldn’t even log on to the site. Oh so many many jokes and so very little time. I would love to hear some of yours. If you think the tax penalty is way more affordable than the alleged affordable care – $95 per adult and $47.50 per child –  just know that the penalty could also be 1% of your applicable income which can translate to a very unaffordable number for you.

The Stock Market’s what?!

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Image courtesy of jscreationzs/FreeDigitalPhotos.net

“Stock market’s rigged,” says author Michael Lewis, whose explosive new book “Flash Boys” accuses a group of Wall Street insiders of rigging the stock market. “Flash Boys” tells the story of how high-frequency traders make billions via computerized trading. But how is this trading different from all other trading? For instance, these flash traders, are able to manipulate the market by figuring out what you’re going to buy, drive the price up and then sell it to you. Kind of like fortune telling except the fortunes are real (and so is the telling, for that matter) and you’re not the one making the fortune. All this takes place in seconds – actually less. But is it legal? Yes, but only because it’s so complicated. If it weren’t so complicated, it probably wouldn’t be allowed. Go that? Neither did I.

Bring on the McBattle…

Image courtesy of cbenjasuwan/FreeDigitalPhotos.net

Image courtesy of cbenjasuwan/FreeDigitalPhotos.net

It matters not how you feel about McDonald’s but rather how you feel about coffee since they are giving it away in April. It’s part of the first-ever National Free Coffee Event. It’s also probably part of the National Fast-Food Breakfast Wars (I made that one up) as McDonald’s and Taco Bell battle it out to feed you in the mornings. Taco Bell has a new breakfast menu that they’ve been heavily promoting and McD’s is a bit worried about it (not that they’ll ever admit that). So to take a big bite out of that south of the border momentum, McD’s is hoping to lure you with free coffee and then reel you in for breakfast. But you better hurry for your McD’s buzz as the promotion ends April 31.