Should You Get Rid of WellCare (WCH) Now? - Tale of the Tape
24 Februar 2014 - 2:58PM
Zacks
Similar to wise buying decisions, exiting certain
underperformers at the right time helps maximize portfolio returns.
Selling off losers can be difficult, but if both the share price
and estimates are falling, it could be time to get rid of the
security before more losses hit your portfolio.
One such stock that you may want to consider dropping is
WellCare Health Plans, Inc. (WCG), which has
witnessed a significant price decline in the past four weeks, and
it has seen negative earnings estimate revisions for the current
quarter and the current year. A Zacks Rank #5 (Strong Sell) further
confirms weakness in WCG.
A key reason for this move has been the negative trend in earnings
estimate revisions. For the full year, we have seen 12 estimates
moving down in the past 30 days, compared with no upward revision.
This trend has caused the consensus estimate to trend lower, going
from $5.13 a share a month ago to its current level of $4.04
cents.
Also, for the current quarter, WellCare has seen 11 downward
estimate revisions versus no revision in the opposite direction,
dragging the consensus estimate down to 5 cents a share from 59
cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the
share price has dropped 12.9% in the past month.
So it may not be a good decision to keep this stock in your
portfolio anymore, at least if you don’t have a long time horizon
to wait.
If you are still interested in the medical sector, you may instead
consider some better-ranked stocks including Aetna
Inc. (AET), Actavis plc (ACT) and
Actelion Ltd. (ALIOF). All these stocks hold a
Zacks Rank #2 (Buy) and may be better selections at this time.
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WELLCARE HEALTH (WCG): Free Stock Analysis Report
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