Health Insurance Innovations short report created opportunity: Northland

Noting that a short report went after Health Insurance Innovations “again,” claiming that Simple Health, a distributor which was closed by the FTC, recently received $145M in commissions, Northland analyst Mike Grondahl noted that management said that the company did not pay $145M in commissions to Simple Health and he believes Simple and any related sub agents/brokers is less than 10% of business in 2018. Simple Health was also low margin and a much smaller percentage of adjusted EBITDA, according to Grondahl, who sees the short report having “created another opportunity in the shares.” The analyst, who also noted that short interest recently has risen to 4.4M shares, or 28% of outstanding, keeps an Outperform rating with an $85 price target on Health Insurance Innovations. The stock closed yesterday down $1.93, or 5.8%, at $31.20.

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