Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified WellPoint as such a stock due to the following factors:
- WLP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $208.8 million.
- WLP has traded 413,436 shares today.
- WLP traded in a range 248.3% of the normal price range with a price range of $5.44.
- WLP traded below its daily resistance level (quality: 18 days, meaning that the stock is crossing a resistance level set by the last 18 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on WLP:
WellPoint, Inc., a health benefits company, through its subsidiaries, provides a range of medical products in the United States. The company offers a spectrum of network-based managed care health benefit plans to large and small employer, individual, Medicaid, and senior markets. The stock currently has a dividend yield of 1.5%. WLP has a PE ratio of 14.1. Currently there are 6 analysts that rate WellPoint a buy, no analysts rate it a sell, and 12 rate it a hold.
The average volume for WellPoint has been 1.8 million shares per day over the past 30 days. WellPoint has a market cap of $32.3 billion and is part of the health care sector and health services industry. The stock has a beta of 0.58 and a short float of 4.5% with 6.78 days to cover. Shares are up 21.8% year-to-date as of the close of trading on Tuesday.
rates WellPoint as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Compared to its closing price of one year ago, WLP's share price has jumped by 31.80%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WLP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- WLP's revenue growth trails the industry average of 16.0%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, WLP has a quick ratio of 1.58, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $1,387.50 million or 44.99% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 21.00%.
- You can view the full WellPoint Ratings Report.