April 27, 2012
Written By Dennis Slothower
Dennis Slothower’s Stealth Stocks is currently ranked at the fourth-best-performing newsletter (adjusted for risk) over the past five years by Hulbert Financial Digest.
“WellCare Health Plans, Inc. (WCG) provides managed care services exclusively to government-sponsored health care programs, serving approximately 2.6 million members as of December 31, 2011. …
“WellCare has several things going for it. It is the fastest-growing healthcare provider in this sector, with its gross profit increasing 54.2% over the last four quarters. It seems to me that as the baby boomers push into retirement years their healthcare needs will only go higher, and WellCare is well-poised to benefit.
“However, if the healthcare law is thrown out by the Supreme Court, healthcare companies are expected to benefit by being able to be more ‘selective’ about which care is given. WCG continues to make new yearly highs in a well-established uptrend. This is a company that should weather recessionary conditions.
“According to my numbers, WCG should be selling in the $110 range. It is currently trading around $70; so WCG has large upside potential. Place a sell stop at 25% below your entry price. As the stock rises, continue to raise your stop so that you are trailing the Friday close by 25%.”
- Dennis Slothower, Stealth Stocks, April 2012