Molina Healthcare Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Molina Healthcare (NYS: MOH) fell more than 11%, just one day after they rallied as much as 8% on news that the company had won a portion of Texas's Medicaid contract.

So what: Maybe the Texas Medicaid program won't benefit Molina as much as investors had originally thought? Peer Amerigroup (NYS: AGP) is also down today, but that seems to owe more to a Bank of America downgrade than anything else.

Now what: Either way, Molina trades for a slight discount to the long-term earnings growth rate analyst expect, resulting in a 0.90 PEG ratio according to Yahoo! Finance data. Is that fair? You tell me. Weigh in using the comments box below.

Interested in more info on Molina Healthcare?Add it to your watchlist.

At the time this article was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sportfolio holdingsandFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.Motley Fool newsletter serviceshave recommended buying shares of AMERIGROUP. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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