WCG

Wellcare Health Plans Inc

Healthcare


Presented:12/11/2018
Price:$242.41
Cap:$12.12B
Current Price:$349.92
Cap:$17.61B

Presented

Date12/11/2018
Price$242.41
Market Cap$12.12B
Ent Value$17.63B
P/E Ratio25.15x
Book Value$83.28
Div Yield0%
Shares O/S49.99M
Ave Daily Vol1,144,407
Short Int4.20%

Current

Price$349.92
Market Cap$17.61B
WellCare Health Plans, Inc. engages in the provision of government-sponsored managed care services through Medicaid, Medicare Advantage, and Medicare Prescription Drug Plans to families, children, seniors, and individuals with complex medical needs. It operates through the following segments: Medicaid Health Plans, Medicare Health Plans, and Medicare PDPs. The Medicaid Health Plans segment includes plans for beneficiaries of TANF, SSI and ABD programs and other state-based programs that are not part of the Medicaid program, such as CHIP and MLTC. The Medicare Health Plans segment provides a comprehensive array of Part C and Part D benefits to Medicare eligible persons, through the MA plans. The Medicare PDPs segment serves as a plan sponsor offering stand-alone Medicare Part D PDP plans to Medicare-eligible beneficiaries through this segment. The company was founded in May 2002 and is headquartered in Tampa, FL.

Publicly traded companies mentioned herein: Aetna Inc (AET), Anthem Inc (ANTM), Centene Corp (CNC), CVS Health Corp (CVS), Cigna Corporation (CI), Express Scripts Holdings (ESRX), Humana Inc (HUM), Molina Healthcare Inc (MOH), WellCare Health Plans Inc (WCG).

Highlights

The presenter is long shares of WellCare (WCG) and believes that the managed care organization (MCO) will benefit in 2019 from a number of drivers, including: accretion from the Meridian deal, lower SG&A, a strong management team, and the Health Insurer Fee (HIF) going away. With the recent market pullback, the stock is down 30% from its peak and currently trades at $246. This represents a much larger pullback than the other MCOs: Molina is down 13%, Humana 13%, and the others 7% - 8%, although there is no clear reason as to why. As a result of the drivers and the outsized pullback, he believes that the stock has the most upside potential looking out 12 - 24 months. His base case price target range is $305 - $310, which is based on applying a 17x multiple to a 2020 earnings forecast of $18/share (for 25% upside within 12 months).

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Request access to DeMatteo Research for full access

Request Access

Already have an account?

Idea Discussion

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Idea Discussions display submitted commentary from our investor community.

To read and participate in the discussion with the presenter and investor base, request access to DeMatteo

Request Access

Already have an account?

An error occurred loading this content. Try again later or contact us.