Goldman Sachs Remains Bullish On Managed Care Sector

Goldman Sachs remains bullish in its managed care sector view with CIGNA CI, CL-Buy, UnitedHealth UNH, Buy, and Health Net HNT, Buy, as its favorite names. Conference call takeaways reinforce Goldman's view of accelerating consolidation as economies of scale become increasingly important, with an increasing advantage for the largest carriers, and more exits of smaller and “fringe” carriers. Looking ahead to 2014, the call highlighted the potential for a disruptive new entrant, like a Wal-Mart, to come in seeking to be the “low cost producer”. Meanwhile, the big unknown is whether we will see employers drop coverage in large numbers as the new insurance exchanges are implemented in 2014. CI is trading lower at $35.96 UNH is trading higher at $34.76 HNT is trading higher at $26.34