- The Washington Times - Tuesday, January 28, 2003

Investors in Coventry Health Care, a Bethesda managed health care provider, will be watching President Bush's State of the Union speech tonight for signs that would inject life into the company's stock.
Coventry doubled its earnings growth in the most recent quarter and forecast further growth this year. But its stock price has remained low as hopes dim that Congress will pass legislation that would bring more business to private health care companies.
Mr. Bush's speech will address health care including a Medicare prescription drug benefit and malpractice insurance reform and is likely to repeat his long-held support of private-sector involvement in providing care, analysts say.
An unexpected shift in philosophy, or harsh words toward health maintenance organizations, could cause Coventry shares to tumble.
Shares of Coventry fell 76 cents, or 2.7 percent, yesterday to close at $27.23 a 52-week low on the New York Stock Exchange.
Analysts say Mr. Bush's speech probably will help Coventry and other companies in the industry.
"If he talks about including the use of the private sector and using it to provide health insurance coverage for the uninsured and underinsured, then that's going to be a positive," said Thomas Carroll, a health care industry analyst with Legg Mason Wood Walker.
"If he talks about managed care companies profiting off the sickness of the country, that would be a negative. But I can't see that coming out of Bush's mouth," Mr. Carroll said.
Analysts say health care legislation probably will not pass Congress this year, and this has depressed stock prices in the industry. Mr. Carroll said most of Coventry's investors have already factored that in.
"Investors are all over the issue with up-to-the-second information, and it's already baked into the price of the company," he said.
"At this point, they have proven to themselves that they can buy [other] properties, execute on them and turn them around," Mr. Carroll said.

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