Diamonds and Dogs

3/27/19

Homebuilders are rebounding. The nation's largest home builder, Lennar (LEN) is jumping 4% to a eight month high following earnings. Earnings actually missed earnings estimates as revenue rose 29.8% to $3.87 billion, missing estimates as well. However, Lennar is making strategic initiatives to sell their brokerage business and the majority of its title insurance and retail mortgage businesses. Order growth appears to be picking as the seasonally strong spring season arrives. Lower interest rates don't hurt either.

U.S. health insurer, Centene (CNC) is down 5% to a one year low after agreeing to buy smaller rival WellCare Health Plans (WCG) for $15.27 billion, in a move to bulk up its government-backed Medicare and Medicaid businesses while reducing exposure to Obamacare healthcare exchanges. Centene relies on its Obamacare business for about 40 percent of its earnings, making it among the most vulnerable companies should the law be overturned. The combined company will have 22 million members, up from around 14 million for Centene at the end of 2018. WellCare is trading up 10% today.