Buy-Side Activity – First Health Group Corp – Brief Article – Statistical Data Included
First Health Group’s recently announced earnings, while weaker year over year, where largely in-line with Street expectations. According to the company, the shortfall reflects an initiative to focus on larger, multi-sited national employers in the group health area–or more specifically, the resulting loss of revenue from accounts that did not fit this strategy. On the bright side, the company recently announced a contract with CNA for the Mail Handlers Benefit Plan–a major deal, which is expected to drive growth in the coming year. Despite the stock’s recent strength, Company insiders are taking the opportunity to up their own stakes and are exercising options not set to expire until ’04. From May 19 through June 11, three insiders exercised options (strike prices ranging from $9.67 to $11.90) to acquire a combined 105,000 shares. Leading the way, VP, CFO Joseph Whitters exercised options to acquire 63,000 shares. EVP, COO Edward Wristen did likewise for 30,000 shares, while Michael Boskin exercised to acqu ire 12,000 shares. Significantly, all the options exercised are non-qualified stock options. As always, tax ramifications of non-qualified options favors exercise with the stock trading at the lowest possible market price. It is especially encouraging to find these insiders exercising options as the share price has moved off an apparent bottom. That they did not await a pullback implies a degree of confidence that the rally should not be short lived. As mentioned, the exercise of non-qualified stock options has historically been among the more reliable signals sent by corporate insiders. First Health Group Corp. provides Preferred Provider Organization, clinical cost management, fee schedule and other cost management services.
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