Estimates for WellCare Health Plans, Inc. (WCG - Free Report) have been revised upward over the past 30 days, reflecting analysts’ confidence in the stock. The stock has seen the Zacks Consensus Estimate for 2018 and 2019 earnings being raised 0.88 % and 0.9%, respectively.
WellCare Health offers managed care services for government-sponsored health care programs. The company flaunts an impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. The stock also sports a Zacks Rank #1 (Strong Buy).
In the past year, shares of the company have surged 38.4%, outperforming the industry’s growth of 34.46%.
Now, let us focus on some important factors that make WellCare Health stock an investor favorite.
Increasing Top Line: The company has seen steady revenue growth since 2006, riding high on solid organic and inorganic growth strategies as well as a strong balance sheet. Revenues have witnessed a five-year CAGR (2012-2017) of 18%. The company is expected to retain its revenue momentum in the future as well. In first-quarter 2018, the top line improved 17.5%. Moreover, the company has been actively expanding its geographical footprint and its presence across different industries.
Inorganic Growth: Active acquisitions and partnerships over the past six years have helped the company grow substantially. The company’s Medicaid business and portfolio were aided by the buyouts of Care1st Arizona and Advicare. In 2017, it completed the consolidation of Universal American Corp, which aided in driving 42% growth year over year in Medicaid Health premiums during the first quarter of 2018. Arizona-based Medicaid assets of Phoenix Health Plan was also acquired by WellCare Health. Recently, the company announced to acquire Meridian Health Plans of Michigan and Illinois and MeridianRx, a pharmacy benefit manager (PBM), to become the top-most Medicaid provider in both states.
Strong Cash Flow: WellCare Health enjoys a robust cash position in the current scenario. With increasing cash flows from operating activities, the company witnessed a four-year CAGR of 55.6% during the 2013-2017 period. High level of financial liquidity is likely to boost inorganic growth initiatives like before. Also, the company’s 47% leverage ratio is lower than the industry’s 58.5% ratio, mirroring its inherent strength.
Other Stocks to Consider
Investors interested in the Medical-HMO industry may also take a look at a few other top-ranked stocks like Anthem, Inc. (ANTM - Free Report) and Humana Inc. (HUM - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
Anthem operates as a health benefits company in the in the United States, providing network-based managed care health benefit plans to individuals — small as well as large groups —Medicaid and Medicare markets. With a Zacks Rank #2 (Buy), the company managed to deliver an average four-quarter beat of 7.22%.
Humana operates as a health and well-being company in the United States. It carries a Zacks Rank of 2 and pulled off an average four-quarter positive surprise of 6.16%.
UnitedHealth Group Incorporated operates as a diversified health care company in the United States. The stock is a Zacks #2 Ranked player and came up with an average four-quarter earnings surprise of 3.64%.
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