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 $154.3 million.
- WLP has traded 1.9 million shares today.
- WLP traded in a range 204.3% of the normal price range with a price range of $3.47.
- WLP traded below its daily resistance level (quality: 13 days, meaning that the stock is crossing a resistance level set by the last 13 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, offers network-based managed care plans to large and small employer, individual, Medicaid, and senior markets in the United States. The company operates through three segments: Commercial, Consumer, and Other. The stock currently has a dividend yield of 1.8%. WLP has a PE ratio of 9.1. Currently there are 7 analysts that rate WellPoint a buy, no analysts rate it a sell, and 10 rate it a hold.
The average volume for WellPoint has been 1.9 million shares per day over the past 30 days. WellPoint has a market cap of $25.2 billion and is part of the health care sector and health services industry. The stock has a beta of 0.46 and a short float of 2.6% with 4.42 days to cover. Shares are up 38.4% year to date as of the close of trading on Friday.
rates WellPoint as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- WLP's revenue growth has slightly outpaced the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 15.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.61, 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 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 36.08% and other important driving factors, this stock has surged by 43.48% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
- WELLPOINT INC has improved earnings per share by 36.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WELLPOINT INC increased its bottom line by earning $8.13 versus $7.19 in the prior year. This year, the market expects an improvement in earnings ($8.28 versus $8.13).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Providers & Services industry average. The net income increased by 24.3% when compared to the same quarter one year prior, going from $643.60 million to $800.10 million.
- You can view the full WellPoint Ratings Report.