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Sparkling Stock 'Diamond' Sells...Salt!

Thursday, 27 Jan 2011 | 4:27 PM ET

Stock of the day is worth its weight in...salt. As in...get the roads salted in New York!

Compass Minerals up another 2 percent today, to an historic high. The company makes... salt. Salt used in road de-icing and dust control, food processing, water softeners, pool salt, and agricultural and industrial applications.

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Many HMOs at new highs today. Why the rally?

Big names like United Healthcare , Coventry , Amerigroup , Molina and Cigna all at 52-week highs today. Several factors behind the rally, analysts tell me:

1. Valuations attractive — P/E ratios of 9-10x — this is key factor in the context of willingness to purchase stocks on good news

2. MLRs (medical loss ratios) contained, since fewer people having been going to the doctor and the hospital

3. 2011 guidance favorable

4. Healthcare repeal unlikely, and HMOs will be part of the long-term solution to rising healthcare costs.

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YAF
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CI
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CMP
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HCA
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MC
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UNH
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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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