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Consider Two Potential Winners of Obamacare

The new buyback plan replaces a $75 million repurchase program that Molina's board adopted last February. Although the company doesn't pay a dividend yet, as of June 30 MOH had a deep cash cache of around $31.99 per share, so the potential for a future dividend is certainly feasible.

MOH reports its latest quarterly earnings on Oct. 21 and analysts are calling for an enormous increase in earnings-per-share (EPS) from the same quarter last year. From 7 cents a share a year ago to 31 cents a share this year will equate to nearly a 443% growth in EPS.

Revenue and sales growth is expected to increase by nearly 12% for the latest quarter, but by year's end the annual increase in revenue over 2012 may see a jaw-dropping 771% annual improvement.

Analysts expect Molina's EPS to increase 40% in 2014 to $2.26, which would make MOH the fastest-growing insurer traced by Thomson Reuters.

The company will apparently be a big beneficiary from the decision so far by 26 states to expand their Medicaid programs. That equals almost $5 billion in added Medicaid expenditures.

WellCare Health Plans has a very similar business model and growth trajectory. WCG provides managed care services targeted to government-sponsored health care programs, focusing on Medicaid and Medicare.

Headquartered in Tampa, WellCare offers a variety of health plans for families, children, and the aged, blind, and disabled, as well as prescription drug plans. The company served approximately 2.8 million members nationwide as of June 30, 2013.

On Oct. 2, WellCare announced that it has added eight new counties across three states to its 2014 Medicare Advantage service area. With the addition of these new counties, WellCare will offer Medicare Advantage plans in 210 counties in 14 states.

WellCare steps into the earnings confessional on Nov.1 and the consensus EPS estimate among analysts is for nearly a 50% year-over-year quarterly improvement. The revenue and sales growth increase is also anticipated to be up by an impressive 31% for the latest quarter compared with the year-ago quarter.

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