$53.17

4.42 (9.07%)

7/23/2008 4:01 PM

WellPoint, Inc. (WLP)

CAPS Rating:

A publicly traded commercial health benefits company offering a spectrum of network-based managed care plans to the large and small employer, individual, Medicaid and senior markets.

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What the Community Thinks

Total Members

610 Outperforms

40 Underperforms

All-Stars

208 Outperforms

7 Underperforms

Wall Street

14 Outperforms

0 Underperforms

Members bullish on WLP are also bullish on:

Members bearish on WLP are also bearish on:

Ticker Tags

Business Week 50 (50), S&P 500 (481), Health Care Plans (17), Buffett Stock (50), Indianapolis (5), Indiana (7), Large Cap (467)
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WellPoint, Inc. At A Glance

Current Price:	$53.17
Last Trade Time:	7/23/2008 4:01 PM
Open:	$0.00
Previous Close:	$53.17
Daily Range:	$51.20 - $53.78
52-Week Range:	$43.02 - $90.00
Volume:	10,837,181
Market Cap:	$27.19B
P/E Ratio:	9.65
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Stock Trends

WLP VS S&P 500 (SPY)

News & Discussion Boards

Other News Headlines for WLP

WellPoint 2Q profit drops but beats forecast
7/23/2008 7:06:00 PM - AP
Earnings roundup: Anadigics, WellPoint
7/23/2008 6:30:00 PM - AP
Outlook roundup: Costco, Aflac
7/23/2008 6:15:00 PM - AP
Sector Wrap: 2Q earnings boost health insurers
7/23/2008 4:56:00 PM - AP

More Headlines...

Top Bull Pitch

Recs

3 WellPoint, Inc. (WLP)

Avatar rd80 (99.73) Submitted: 6/08/08 2:28 PM

This is why I need to enter pitches soon after making picks. I don't recall why I picked this in the first place.

Wellpoint offers a variety of managed healthcare plans to employers, individuals, Medicaid and Medicare markets. There's a lot of political uncertainty in that business.

The stock pr...More

Replies: 0 | Reply | Permalink

Top Bear Pitch

Recs

2 WellPoint, Inc. (WLP)

Avatar TMFLuLu (87.76) Submitted: 7/23/07 6:27 PM

Look at insider trading and expense ratios, insiders are selling and the expense ratios are on the rise.

Replies: 0 | Reply | Permalink

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Recs 0 (WLP) eddieinalbq (68.23) Submitted: 7/23/08 1:42 PM : Start Price: $53.08 WLP Score: 0.32 This stock is way oversold and a holding of Warren Buffet. Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 0 (WLP) RVAspeculator (85.78) Submitted: 7/22/08 11:09 PM : Start Price: $48.48 WLP Score: 12.61 Obama or no Obama this whole group of stocks are undervalued here. If they socialize medicine I close my outperform! Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 0 (WLP) oxsigtech (37.75) Submitted: 7/17/08 7:12 PM : Start Price: $46.10 WLP Score: 13.72 Baby boomers. Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 1 (WLP) aparker385 (73.99) Submitted: 7/12/08 1:40 PM : Start Price: $44.87 WLP Score: 16.25 Health care costs in the United States are set to double from over $2 trillion today to over $4 trillion by 2016 The demand for healthcare is relatively inelastic. People will pay to have coverage. Why? Generally, people pay so that they can get treatment, get healthy, and live. Insurance protects people from going bankrupt in the case of an emergency So, which health insurer is best positioned to benefit from incredible economic fundamentals? WellPoint. WLP has dominant local market share in its Blue Cross Blue Shield (BCBS) markets. As a BCBS licensed member, it is part of the nation’s largest health insurance network. 1 in 3 Americans have a BCBS membership. 1 in 10 Americans is part of WLP's network. Dominant market share and the strongest brand in healthcare give WLP negotiating leverage over providers and, in turn, lower premiums to customers. Additionally, the firm has extensive data, technology, and expertise in forecasting costs and determining rational premium pricing. How can anyone compete with this? It is not an easy moat to cross. 47 million people in the United States are uninsured. The government is constantly proposing new ways to cover these people. The good news for WLP is that whatever the government comes up with will not change the fact that medical costs keep rising, that people still want coverage, and that WLP and the other large insurers are best equipped to provide that coverage. At the end of the day, the large insurance companies will benefit in some capacity from any increase in government programs ("more spending on healthcare"). If any type of price war or competition continues, the biggest players are best positioned to fight. Almost inevitably, WLP will come out victorious in any competitive battle that takes places. Let's review some other benefits of the health insurance business: 1) Insurers get premium revenue immediately, which they invest in safe fixed income products and generate income. This is the float that is kept on the balance sheet and paid out later to cover costs 2) Capital investments are limited to improving technology and maintaining infrastructure. Generally, insurance is not capital spending intensive 3) Millions of customers means diversity. There is minimal catastrophic risk for insurers. A huge epidemic, outbreak, or other nationwide plague may seriously threaten the solvency of insurers. Anything short of that will not put them out of business Given these outstanding business economics, who would not want to own this business? Well, it clearly depends on the price. The good news is that current economic and market conditions have created the opportunity to own WLP at an outstanding price. Higher than expected MLRs, industry down cycle (which WLP is largely immune to because it does not compete with the non-profit blues), a weakening economy (higher unemployment means less premium revenue and more people unable to afford coverage), and political uncertainty have caused institutions to dump their shares. This stock, along with the others in the sector, was over-owned. You combine all these uncertainties with general market bearishness, short-term thinking institutional ownership and you're left with a once in a lifetime opportunity. WLP is currently on sale for around 7.5x next year’s earnings. Even better, next year’s FCF yield is around 15% based on today's stock price. 15%! This stock has NEVER been this cheap. Since WLP uses most of its FCF to buy back shares, then technically the equity could disappear in less than 7 years if the stock price does not go up. That is fun to think about, but realistically, imagine what will happen when the stock does start to go up after WLP has gobbled up tons of stock at todays on sale prices. You can do the math. If you can stomach potentially more downside from here and not much movement upward for some time and believe in the big picture fundamentals, then you should load up while the shares are cheap and buy more all the way down. Report this Post Replies: 2 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 0 (WLP) mario107 (60.63) Submitted: 7/08/08 5:14 PM : Start Price: $46.71 WLP Score: 13.27 Value investment at "sale" price. Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out.
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Wall Street

Results 1 - 14 of 14

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Top Pick	Member Name	Member Rating	Start Date	Call	Time Frame	Start Price	Stock Gain	S&P Gain	Score	Pitch
	TrackEinhorn	76.90	05/30/08 05/30/08		1Y	$56.50	-5.89%	-8.83%	+2.94
	TrackBerkowitz	85.39	05/27/08 05/27/08		1Y	$55.01	-3.34%	-6.96%	+3.61
	TrackBMOCapital	96.80	05/27/08 05/27/08		NS	$55.01	-3.34%	-6.96%	+3.61
	TrackUBS	94.11	01/24/08 01/24/08		NS	$76.53	-30.52%	-4.82%	-25.70
	TrackDeutscheSec	89.63	01/02/08 01/02/08		NS	$87.84	-39.47%	-12.50%	-26.97
	TrackWachovia	80.07	11/19/07 11/19/07		NS	$82.20	-35.32%	-11.75%	-23.57
	TrackZacks	90.45	10/26/07 10/26/07		3M	$78.70	-32.44%	-16.54%	-15.90
	TrackSoros	89.82	09/30/07 09/30/07		NS	$78.92	-32.63%	-15.97%	-16.66
	TrackBuffett	73.68	09/30/07 09/30/07		NS	$78.92	-32.63%	-15.97%	-16.66
	TrackEveillard	93.14	09/30/07 09/30/07		NS	$78.92	-32.63%	-15.97%	-16.66
	TrackDodgeCox	98.33	09/30/07 09/30/07		NS	$78.92	-32.63%	-15.97%	-16.66
	TrackEdwardOwens	99.11	09/30/07 09/30/07		NS	$78.92	-32.63%	-15.97%	-16.66
	TrackWWeitz	< 20	09/30/07 09/30/07		NS	$78.92	-32.63%	-15.97%	-16.66
	TrackAGEdwards	89.94	02/21/07 02/21/07		NS	$81.53	-34.78%	-11.97%	-22.82
	TrackJimCramer	81.15	04/26/06 04/26/06		3W	$70.44	-24.52%	-2.03%	-22.49

Results 1 - 14 of 14

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