WellPoint Inc(NYSE:WLP), the largest provider of Blue Cross Blue Shield in the country, was thought to be a goner when Obamacare came into being. And there were a couple of missteps along the way that drove home that idea for the Street.
But despite all the doubters, the company has thrived and is up 40% this year and is still only trading at 12 times 2015 earnings. That’s cheap!
There is still a lot of fear in the stock, according to GAMCO Investors, but most see a winner in the insurer.
The price target has been raised to $130 per share from $106. And that will still be a very reasonable 14 times 2015 earnings.
Its focus on individuals and small companies that stand to benefit from the Obama healthcare plan and maintaining commercial sales has pushed the company’s numbers higher and higher.
WellPoint has raised full-year 2014 estimates for the second time this year to $8.50 per share and $9.20 in 2015.
Despite the rough start the exchanges under Obamacare had, WellPoint says its operations in this arena are profitable.
Wellpoint is paying down debt, raising the dividend, buying back stock and flush with cash flow. This is one for the patient, but you will be rewarded.
Think Long Term, Make Money
James Anderson of Baillie Gifford, based in Edinburgh, Scotland, has beaten the broad market by as much as 50% per year for the past decade not just by ignoring short returns but also by buying the favorite stocks of the day, even if they seemed expensive at the time.
And the stocks that have done so well for the past 10 years are described as not being not beholden to quarterly capitalism. That’s the short-term focus almost the entire stock world has on investments: quarterly results.
Anderson says to ignore the short term and look way down the road; five years, at least. He’s owned stocks in his portfolio for 25 years and more.
The average stock mutual fund holds a stock for an average of 18 months.
Anderson says to focus on firms that look to grow in the distant future. Don’t aim for the short term at all. Imagine what a company will look like in the next five years.
You can’t argue with his results. He’s averaged 13.1% a year for