WellCare Health Plans rises 1.1% from 14-day low, institutional shareholder Retirement Systems Of Alabama buys 10 July 2019

NEWS BITES - NORTH AMERICA

WellCare Health Plans, Inc. (NYSE:WCG), the NYSE's 9th largest Health care provider company by market cap, was up 1.1% from its 14-day low of $US277.33 on July 10. Its Williams % R is -86.9 which suggests it is oversold, a bullish signal. Its Relative Strength Index [RSI] is 28.1. An RSI reading of between 0 and 30 suggests WellCare Health Plans' stock is close to its 14-day low, which is also a bullish signal. WellCare Health Plans' stock price has increased $US2.45 (0.9%) from its previous trading session to close at $US280.30. Compared with the S&P 500 Index which rose 13.4 points (0.5%) in the day, the relative price increase was 0.4%. There were 304,273 shares worth $US85.3 million traded today. The volume was 0.3 times the average daily trading volume of 931,362 shares.

TODAY'S BUZZ

News DateHeadlinePublisher
Jul 10$6.60 Billion in Sales Expected for WellCare Health Plans, Inc. (NYSE:WCG) This Quarterdispatchtribunal.com

TODAY'S NEWS

INSTITUTIONAL BUYING

WellCare Health Plans (NYSE:WCG) institutional shareholder Retirement Systems Of Alabama (CIK:0001593051) bought 8,490 shares in the quarter ended June 30, 2019 worth $US2.4 million at an estimated Volume Weighted Average Price (VWAP) of USD272.93. At the end of the quarter Retirement Systems Of Alabama held 129,221 shares worth $US35.3 million.

INSTITUTIONAL SELLING

WellCare Health Plans (NYSE:WCG) institutional shareholder Crossmark Global Holdings, Inc. (CIK:0001539204) sold 409 shares in the quarter ended June 30, 2019 worth $US116,594 at an estimated Volume Weighted Average Price (VWAP) of USD272.93. At the end of the quarter Crossmark Global Holdings, Inc. held 7,933 shares worth $US2.2 million.

BULLISH TURNING POINT

Price/Earnings

The P/E of 27.3 is 0.3 times the highest average P/E of 91.8 in the last five years. This is a value criterion, according to Benjamin Graham who described as a value criterion "A P/E ratio down to less than four-tenth of the highest average P/E ratio the stock attained in the most recent five years".

Stock Summary

Today's close (USD)280.3
52-Week Range (USD)220.6-325.0
SectorHealth Care Providers sector
EPS Growth % (y.o.y)32.5
Shares Outstanding50,302,000
Market Cap$US14.1 billion

Highlights in today's Report:

SECTION 1 TODAY'S BULLISH SIGNALS

SECTION 2 TODAY'S BEARISH SIGNALS

RECAP FROM PREVIOUS REPORTS (UPDATED AT THE LAST PRICE OF $US280.30):

SECTION 3 THE PAST WEEK

SECTION 4 ONGOING BULLISH PARAMETERS

SECTION 5 ONGOING BEARISH PARAMETERS

SECTION 6 REPORTED BUYING AND SELLING

SECTION 7 SUMMARY FINANCIALS

SECTION 8 CORPORATE PROFILE

SECTION 1 WELLCARE HEALTH PLANS BULLISH SIGNALS

1.1 Undervaluation [compared with sector average]:

Earnings Yield

+ Earnings yield of 3.7% is 1.8 times the 10-year bond yield of 2.08%.

Price to Sales

+ Price/Sales of 0.6 [0.7]. We estimate WellCare Health Plans stock is trading at a current year Price/Sales of 0.6 and a forward year Price/Sales of 0.5.

MCap/Total Assets

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 1.2. Compared with the rest of the market the stock is undervalued.

1.2 Undervaluation Indicator and rank of WellCare Health Plans in the NYSE market:

DescriptionValueRank In Market
Price to Sales0.6In Top Quartile

1.3 Uptrend:

+ Rising open interest with rising price

+ Open Interest Trend

Same day trend: The price increased 0.9% from $US277.85 to $US280.30; Open interest has increased 0.2% from 12,471 to 12,495. A price rise combined with an increase in open interest suggests there is new money coming into the market from existing or new buyers. This is a bullish signal.

DurationOpen Interest change %Price change %Interpretation
1-day0.20.9Strong Market

Price/Moving Average Price:

+ The price to 200-day MAP ratio is 1.04, a bullish indicator. In the past 200 days this ratio has exceeded 1.04 64 times suggesting further upside. The 50-day MAP of $US279.25 is higher than the 200-day MAP of $US269.22, a bullish indicator. The 200-day MAP has increased to $US269.22. An increase is another bullish indicator.

1.4 High Price Performance Indicators and rank of WellCare Health Plans in the NYSE market:

DescriptionWCG ValueRank In Market
Today's Trading Turnover$US85.3 millionIn Top 9%
MCap$US14.1 billionIn Top Quartile

Oversold/Bullish Signals:

+ The Relative Strength Index (RSI) of 28.1 has breached the oversold line of 30, suggesting the price decrease of 28.1% in the last 14 days is unusually high.

+ The stock is oversold according to the Williams % R indicator of -86.9, suggesting the price is close to its 14-day low of $US277.33.

+ The Stochastic indicator of 11.8 has pierced the oversold line of 20; this indicates the price is close to its 14-day low and is likely to revert to an uptrend.

SECTION 2 WELLCARE HEALTH PLANS BEARISH SIGNALS

2.1 Overvaluation [compared with sector average]:

Price/Earnings

+ Price/Earnings of 27.3 [20.4].

Price/Earnings/Growth

+ Price/Earnings/Growth of 2.3 [0.8]. The price earnings ratio of 27.3 divided by annual growth in EPS (FY2018 vs FY2017) of 11.9% corresponds to a P/E/G of 2.3 times.

2.2 Overvaluation Indicators and rank of WellCare Health Plans in the NYSE market:

DescriptionValueRank In Market
P/E * P/NTA378.79In Bottom 2%
Price/Earnings/Growth2.3In Bottom Quartile

2.3 Downtrend:

+ Increasing Put Call Ratio

+ Put Call Contracts

The Put/Call ratio has jumped from 0.603 to 0.604 suggesting a downtrend.

Put ContractsCall ContractsPut/Call ratio
Today4,7057,7900.604
Previous day4,6927,7790.603

Price/Moving Average Price and MACD:

+ The Price/MAP of 1.04 for WCG is lower than the Price/MAP for the S&P 500 Index of 1.09.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 283.35 minus the 26-day EMA of 283.77 is negative suggesting a bearish signal. Both the 12-day EMA as well as the 26-day EMA are falling, another bearish signal.

Past Week:

+ WellCare Health Plans, Inc. is placed 1666/2752 in BuySellSignals' ranking of NYSE performers in the past week, a percentile ranking of 40.

+ In the past week, volume was 0.4 times average and the shares were down 0.5%. Wednesday's close price is at a 0.1% discount to its 5-day Volume Weighted Average Price (VWAP) of $US280.46.

Past Month:

+ The present value of $US1,000 (PV1000) invested one month ago in WellCare Health Plans is $US964, for a capital loss of $US36.

Slipping Relative Strength (1mo, 3 mo):

+ In the NYSE market of 1,879 stocks and 286 units traded today, the stock has a 6-month relative strength of 67 which means it has outperformed 67% of the market.

+ Also, the relative strength percentile is slipping at 38 for 3 months and 10 for 1 month.

RECAP FROM PREVIOUS REPORTS (UPDATED AT THE LAST PRICE OF $US280.30):

SECTION 3 THE PAST WEEK

3.1 Snapshot: WellCare Health Plans stock was down $US1.39 or 0.5% in the past week. Volume in the week was 0.4 times average trading of 3.7 million shares. It outperformed the S&P 500 index in 3 out of 5 days.

DayWellCare Health PlansClose price [USD]Price change %Relative change %Comment
TuesdayDecreases on slipping relative strength277.85-1.2-1.3Steepest Fall
MondayFalls in weak trading with rising open interest281.23-0.50.01Price fall on falling relative strength
FridayInches higher, resistance at 12-day EMA282.550.30.5Price/PMAP200 above 1 and rising
WednesdayIncreases281.69-0.3-1.1Price/PMAP200 above 1 and rising
TuesdayPut call ratio decreases 6.0%, stock increases282.560.60.3Top Rise

3.2 Corporate Wires: WellCare Health Plans (WCG) issued two Releases in the past week.

July 09: WellCare Launches WellCare Works to Connect Members to Employment, Community Engagement and Education Opportunities in Kentucky

LOUISVILLE, Ky. and TAMPA, Fla., July 9, 2019 -- WellCare of Kentucky, a WellCare Health Plans, Inc. (NYSE:WCG) company, is offering a new program to help connect its Medicaid members to tools, training and resources that promote social engagement and empower independence by helping them learn, train, prepare and ultimately secure employment, volunteerism and education opportunities.

July 08: WellCare Supports Educational Scholarships for Georgia Students

ATLANTA and TAMPA, Fla., July 8, 2019 -- Sometimes obtaining an education is the first step toward a healthier lifestyle. That's why WellCare of Georgia, a WellCare Health Plans, Inc. (NYSE:WCG) company, and the WellCare Community Foundation are committed to helping young adults pursue higher education.

According to the Centers for Disease Control and Prevention, people with higher levels of education and income experience lower rates of chronic diseases compared to those with less education and lower income levels.

3.3 Volatility:

+ WellCare Health Plans is at a discount of 13.8% to its 12-month high of $US324.99 on October 01, 2018. It is also at a premium of 27.1% to the 12-month low of $US220.63 on December 24.

SECTION 4 ONGOING BULLISH PARAMETERS

4.1 Performance:

+ Return on Capital Employed 10.3% [8.2%].

4.2 Growth:

Quarterly Trend in Revenue, Net Profit and Net Profit Margin:

+ Net Profit margin is positive and has seen consecutive rises in recent quarters. [All figures in %]

Qtr-endedRevenue GrowthNet Profit GrowthNet Profit Margin
Mar 19 [Q1]11.4195.52.2
Dec 18 [Q4]20-56.90.9

Annual Trend in Revenue, EPS and EBITDA:

5-years average annualized earnings growth rate of 18.8%

+ Revenue growth rate is positive and has seen consecutive rises in recent years. [Year ended, all figures in %]

YearRevenue GrowthEPS GrowthEBITDA Growth
Dec 182011.949.9
Dec 1719.553.6-13.9
Dec 162.5104.946.1

4.3 Moving Annual Return (Past 5 years)

Based on a dynamic start date of 5 years ago, the real rate of return has averaged 32.4%. The Moving Annual Return has consistently exceeded 9%.

WCGClose (USD)Annual Return %
Jul 10280.39.0
1 Yr ago257.1942.0
2 Yrs ago181.1369.9
3 Yrs ago106.6123.4
4 Yrs ago86.3917.8

Close 5 years ago $US73.34

4.4 Increased ADVT past five years

Avg. Daily Volume Traded 12 months ended Jul 10, thousand shares

YearADVT
2019931.4
2018337.6
2017397.7
2016495.9
2015449.4

In the past five years, Average Daily Volume of Trading (ADVT) has increased 107.3% to 931,362 shares.

4.5 Increased VWAP

Past five years, 12 months ended Jul 10 (USD)

YearHigh PriceVWAPLow Price
2019324.99270.55220.63
2018258.01197.69162.25
2017184.88135.83105.0
2016110.8188.7669.16
201595.0973.2255.43

In the past five years Volume Weighted Average Price (VWAP) has increased by 269.5% to $US270.55. Based on a dynamic start date of five years ago, there has been no decline in VWAP over the last 5 years.

4.6 Increased Average Daily Turnover

Past five years, 12 months ended Jul 10 (USD million)

YearAverage Daily Turnover
2019248.7
201867.3
201754.5
201644.2
201533.2

In the past five years, average daily share turnover has increased 649.9% to $US248.7 million. This suggests increased liquidity.

4.7 Decrease in Insider Selling

In the past 5 years a total of 147,599 WellCare Health Plans shares worth $US18.8 million were sold by insiders. Based on a dynamic start date of 5 years ago, insider selling has averaged 29,520 shares per year. In the past year, insiders sold 9,647 shares, a decrease of 52.9% from the previous year.

SECTION 5 ONGOING BEARISH PARAMETERS

5.1 Performance:

+ Return on Equity 10.4% [15.5%].

+ Return on Assets 3.7% [4.4%].

+ Net profit margin has averaged 2% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

+ As per the Du Pont analysis, Return on Equity [ROE] of 10.4% is lower than sector average of 15.5%. ROE is computed as net profit margin of 2.2% times asset turnover [sales/assets] of 1.7 times leverage factor [total assets/shareholders' equity] of 2.8.

5.2 High Debt Indicators:

+ Total Liabilities/EBITDA of 8.6 compares unfavourably with the Joseph Piotroski benchmark of 5.

5.3 Low Growth and Performance Indicators and rank of WellCare Health Plans in the NYSE market:

DescriptionValueRank In Market
EBITDA Margin %4.3In Bottom Quartile
EPS Growth %11.9In Bottom Quartile

5.4 Decrease in Institutional Ownership

Quarter-endSeptember 30, 2018March 31, 2019
Holdings (%)98.088.4

As at March 31, 2019 Institutions held 88.4% of total shares on issue; a decrease from 98.0% as at September 30, 2018.

SECTION 6 WELLCARE HEALTH PLANS REPORTED BUYING AND SELLING

6.1 Institutional Buying and Selling Quarter Ended March 31

Total reported Institutional buying = 4,418,385 shares

Total reported Institutional selling = 6,546,511 shares

Net reported institutional selling = 2,128,126 shares

6.2 Reported Holdings of Institutions as at Mar 31, 2019

Total = 44,465,852 shares

Market Value = $US12 billion

SECTION 7 WELLCARE HEALTH PLANS SUMMARY FINANCIALS

7.1 Financials Summary

Year endedDec 2018Dec 2017Dec 2016
Sales (USD B)20.41714.2
Pretax (USD M)692.8461.6529.5
Net (USD M)433.6372242.1
EPS (USD)9.48.45.47

+ Net profit was up 16.6% from US$372 million in 2017 to US$433.6 million in 2018.

+ Earnings Per Share (EPS) was up 11.9% from $US8.40 to $US9.40.

7.2 Quarterly Report: Key Parameters

Quarterly Report Q1 2019: WellCare Health Plans reports 196% sequential rise in Quarterly Net Profit

WellCare Health Plans (NYSE:WCG), announced net profit of $US165m for the quarter-ended 31 March 2019, up 195.5% from the previous quarter and up 76.1% from the year-earlier period.

Quarter-ended31 Mar [Q1/2019]31 Dec [Q4/2018]30 Sep [Q3/2018]
EPS, $US3.021.122.74
Sequential growth in EPS %169.64-59.12-19.17
Revenue$US6.8b$US6.1b$US5.1b
Sequential growth in Revenue %11.3920.029.03
Net Profit$US165m$US55.9m$US130m
Sequential growth in Net Profit %195.53-56.93-14.38

Compared with the previous corresponding period [PCP; Q1/2018], year-over-year [y.o.y.] EPS was up 32.5%, Revenue was up 45.5% and Net Profit was up 76.1%.

Quarter-ended31 Mar [Q1/2019]31 Mar [Q1/2018]
EPS, $US3.022.28
PCP growth in EPS %32.4650.0
Revenue$US6.8b$US4.6b
PCP growth in Revenue %45.5417.5
Net Profit$US165m$US93.8m
PCP growth in Net Profit %76.1239.38

7.3 Annual Report: Key Parameters

FY2018 Annual Report: WellCare Health Plans maintains double digit EPS Growth

WellCare Health Plans (NYSE:WCG), announced EPS of $US9.4 for the year-ended 31 December 2018, up 11.9% from $US8.4 in the previous year. Last year the company had reported EPS growth of 53.6% from $US5.47 in FY2016 to $US8.4 in FY2017.

Period-endedEPS in $US
31 December 20189.4
31 December 20178.4
31 December 20165.47

Major changes compared with previous year:

Favourable Changes:

- Net profit up 16.6% from $US372.0m to $US433.6m

- Total revenue up 20% from $US17.0b to $US20.4b

- EPS up 11.9% from $US8.4 to $US9.4

- EBIT Margin up from 2.7% to 3.4%

- EBIT to total assets up from 5.5% to 5.9%

- Sales and marketing expenses to Revenues down from 8.7% to 8.3%

- Profit before tax to Revenues up from 2.7% to 3.4%

- Total liabilities to Total assets down 9.9% from 0.7 to 0.6

- Current ratio up 3.8% from 1.3 to 1.4

- Total non-current assets to Total Assets up from 30.4% to 41.9%

- Current Debtors to Total Assets up from 9.8% to 15.9%

Unfavourable Changes:

- Total revenue to total assets down from 2.0 to 1.7

- Working capital to total assets down from 16.5% to 15.4%

- Retained earnings to total assets down from 21.8% to 19.2%

- Total current assets to Total Assets down from 69.6% to 58.1%

- Total Liabilities to EBITDA of 8.6 compares unfavourably with the Joseph Piotroski benchmark of <5. However, it has improved by 15.7% from the previous year's ratio of 10.2.

- Net tangible assets per share down 30.5% from $US30.87 to $US21.46

Note:

- Tax expenses to Revenues up from 0.5% to 1.2%

- Depreciation to Revenues up from 0.7% to 0.9%

- Debt to Equity steady at 0.5

- Intangibles to Total Assets up from 12.3% to 27.4%

- Short-term investments to Total Assets up from 5.6% to 7.1%

Annual Report [Year-on-year comparison: 2018 vs 2017]

Company Name : WellCare Health Plans, Inc. (WCG)
December 3120182017Change
Description$US m$US m(%)
Total Revenue20,414.117,007.2Up 20
EBITDA872.5582Up 49.9
Depreciation179.7120.4Up 49.3
EBIT692.8461.6Up 50.1
Pre-Tax Profit/(Loss)692.8461.6Up 50.1
Profit/(Loss) after Tax433.6372Up 16.6
Working Capital1,816.81,376Up 32
Current Assets6,832.45,819.2Up 17.4
Current Liabilities5,015.64,443.2Up 12.9
Shareholders' Funds4,2402,416.7Up 75.4
Total Liabilities7,524.75,947.9Up 26.5
Total Assets11,764.78,364.6Up 40.6
Non-Current Debt2,126.41,182.4Up 79.8
Total Debt2,126.41,182.4Up 79.8
Operating Cash Flow2791,050Down 73.4
Net Assets4,2402,416.7Up 75.4
Net Tangible Assets1,016.11,388.1Down 26.8
AuditorDeloitte and Touche LLP 

Year-on-year comparison of Per Share figures

December 3120182017Change (%)
Description$US $US
Cash94.7103.8Down 8.8
Working Capital38.830.9Up 25.6
Total Liabilities160.9133.7Up 20.3
Total Assets251.6188.1Up 33.8
Net Tangible Assets21.530.9Down 30.5
EPS Final9.48.4Up 11.9
    EPS Dilution Factor *0.72  

* EPS Dilution Factor = EPS change / Net Profit change

Year-on-year comparison of Performance Ratios

December 3120182017Change (%)
Return on Equity (%)10.415.5Down 32.9
Return on Assets (%)3.74.5Down 17.8
Total Liabilities to EBITDA8.610.2Down 15.7
Debt/Equity (Up 2% from 0.49 to 0.5)0.50.5Up 2
Total Liabilities/Total Assets0.60.7Down 9.9
Current Ratio1.41.3Up 3.8
Common Size Ratios by Assets %
Total current assets to Total Assets 58.1 69.6 Down 16.5
Total non-current assets to Total Assets 41.9 30.4 Up 37.7
Intangibles to Total Assets 27.4 12.3 Up 122.8
Current Debtors to Total Assets 15.9 9.8 Up 63.0
Short-term investments to Total Assets 7.1 5.6 Up 26.5
Common Size Ratios by Revenues %
Sales and marketing expenses to Revenues 8.3 8.7 Down 4.9
Profit before tax to Revenues 3.4 2.7 Up 25.3
Tax expenses to Revenues 1.2 0.5 Up 132.2
Depreciation to Revenues 0.9 0.7 Up 27.1
Cost of Goods Sold to Revenues 0.7 --

Five-year record of growth and performance:

In the last 5 years Total Revenue averaged $US15,707.6M, EBITDA averaged $US574.1M and Net Profit averaged $US247.6M. Compound Annual Growth Rate (CAGR) averaged 16.5% for Total Revenue, 19.9% for Net Profit and 22.0% for EBITDA.

DescriptionAnnual ($US M)5-year Avg ($US M)5-year CAGR %
Total Revenue20,414.115,707.616.5
EBITDA872.5574.122
Operating Profit692.8470.120
Net Profit433.6247.619.9

Five-year record of EBITDA, Operating Profit, Net Profit, ROE, ROA and ROCE

In 2018 Net Profit Margin of 2.2% was above its 5-year Avg of 1.5% (All Figures in %)

Description20185-year Avg
EBITDA Margin4.33.6
Operating Profit Margin3.42.9
Net Profit Margin2.21.5
Return on Equity10.49.8
Return on Assets3.73.2
Return on Capital Employed10.312.8

SECTION 8 CORPORATE PROFILE

8.1 Activities

WellCare Health Plans, Inc. (WellCare) provides managed care services to government-sponsored healthcare programs, focusing on Medicaid and Medicare. The Company offers prescription drug plans (PDP) and health plans for families, children, the aged, blind and disabled. WellCare also operates Medicare PDP in all 50 states and the District of Columbia. The Company operates in two segments: Medicaid and Medicare.

8.2 Top Management

The chairman is Christian P. Michalik, the chief executive officer is Ken Burdick and the chief financial officer is Drew Asher.

8.3 Issued Capital and MCap

Based on 50,302,000 issued shares the market capitalisation is $US14.1 billion.

8.4 Vanguard Total World Stock ETF 7489:

The stock was one of 7489 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 430 shares in the period Apr 30, 2019 to May 31, 2019 worth $US115,878 at an estimated Volume Weighted Average Price (VWAP) of $US269.4844. As at May 31, 2019, the Vanguard Total World Stock ETF held 16,204 shares worth $US4,366,725 or 0.03% by value of the ETF's portfolio [Ranked 672 out of 7489 by value and 259 out of 1077 for NYSE].

COMPANY IDENTIFIERS

Contact: +1 813 290-6200

Physical Address: 8735 Henderson Road, Renaissance One, Tampa, FL,33634

State/Province/Country: FL [FL], United States

Country of Incorporation: United States

Industry [NAICS]: 923120

Exchange: New York Stock Exchange

Business Sector: Healthcare Services

Industry Group: Healthcare Providers & Services

Industry: Healthcare Facilities & Services

Economic Sector: Healthcare

ISIN: US94946T1060

N:WCG; WCG.N

PermID: 5000222841

RIC: WCG.N

CIK: 1279363

CUSIP: 94946T106

Wellcare Health Plans Inc, Wellcare Health Plans, Inc

Source: www.BuySellSignals.com