Intrinsic value of WellCare Health Plans - WCG

Previous Close

$256.18

  Intrinsic Value

$1,176

stock screener

  Rating & Target

str. buy

+359%

Previous close

$256.18

 
Intrinsic value

$1,176

 
Up/down potential

+359%

 
Rating

str. buy

We calculate the intrinsic value of WCG stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 11.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  19.50
  18.05
  16.75
  15.57
  14.51
  13.56
  12.71
  11.94
  11.24
  10.62
  10.06
  9.55
  9.10
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
  6.96
  6.76
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.84
  5.76
  5.68
Revenue, $m
  20,323
  23,992
  28,009
  32,370
  37,068
  42,096
  47,444
  53,107
  59,077
  65,350
  71,921
  78,790
  85,956
  93,422
  101,192
  109,272
  117,672
  126,401
  135,472
  144,899
  154,698
  164,888
  175,487
  186,516
  197,999
  209,960
  222,425
  235,422
  248,980
  263,129
Variable operating expenses, $m
  18,860
  22,246
  25,954
  29,979
  34,315
  38,955
  43,892
  49,118
  54,628
  60,417
  66,379
  72,719
  79,333
  86,223
  93,395
  100,853
  108,605
  116,662
  125,034
  133,735
  142,779
  152,183
  161,965
  172,145
  182,743
  193,783
  205,287
  217,283
  229,796
  242,855
Fixed operating expenses, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
Total operating expenses, $m
  18,859
  22,245
  25,953
  29,978
  34,314
  38,954
  43,891
  49,117
  54,627
  60,416
  66,378
  72,718
  79,332
  86,222
  93,394
  100,852
  108,604
  116,661
  125,032
  133,733
  142,777
  152,181
  161,963
  172,143
  182,741
  193,781
  205,285
  217,281
  229,794
  242,853
Operating income, $m
  1,464
  1,747
  2,056
  2,392
  2,754
  3,142
  3,554
  3,990
  4,450
  4,934
  5,543
  6,072
  6,624
  7,200
  7,798
  8,421
  9,068
  9,741
  10,440
  11,166
  11,921
  12,706
  13,523
  14,373
  15,258
  16,179
  17,140
  18,141
  19,186
  20,276
EBITDA, $m
  1,691
  1,996
  2,330
  2,693
  3,083
  3,501
  3,946
  4,417
  4,913
  5,435
  5,982
  6,553
  7,149
  7,769
  8,416
  9,087
  9,786
  10,512
  11,266
  12,050
  12,865
  13,712
  14,593
  15,511
  16,465
  17,460
  18,497
  19,577
  20,705
  21,881
Interest expense (income), $m
  57
  74
  148
  229
  317
  413
  517
  628
  746
  871
  1,002
  1,140
  1,285
  1,437
  1,595
  1,759
  1,931
  2,109
  2,294
  2,486
  2,686
  2,894
  3,110
  3,335
  3,568
  3,812
  4,065
  4,328
  4,603
  4,890
  5,189
Earnings before tax, $m
  1,390
  1,599
  1,828
  2,075
  2,341
  2,625
  2,926
  3,244
  3,580
  3,931
  4,402
  4,787
  5,188
  5,605
  6,039
  6,490
  6,959
  7,447
  7,953
  8,480
  9,027
  9,596
  10,188
  10,804
  11,446
  12,115
  12,811
  13,538
  14,296
  15,087
Tax expense, $m
  375
  432
  493
  560
  632
  709
  790
  876
  967
  1,061
  1,189
  1,292
  1,401
  1,513
  1,631
  1,752
  1,879
  2,011
  2,147
  2,290
  2,437
  2,591
  2,751
  2,917
  3,090
  3,271
  3,459
  3,655
  3,860
  4,074
Net income, $m
  1,014
  1,167
  1,334
  1,515
  1,709
  1,916
  2,136
  2,368
  2,613
  2,870
  3,214
  3,494
  3,787
  4,092
  4,408
  4,738
  5,080
  5,436
  5,806
  6,190
  6,590
  7,005
  7,437
  7,887
  8,356
  8,844
  9,352
  9,883
  10,436
  11,014

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  9,729
  11,485
  13,408
  15,496
  17,745
  20,151
  22,711
  25,422
  28,280
  31,283
  34,428
  37,716
  41,147
  44,721
  48,440
  52,308
  56,329
  60,508
  64,850
  69,363
  74,054
  78,931
  84,005
  89,285
  94,782
  100,508
  106,475
  112,696
  119,186
  125,959
Adjusted assets (=assets-cash), $m
  9,729
  11,485
  13,408
  15,496
  17,745
  20,151
  22,711
  25,422
  28,280
  31,283
  34,428
  37,716
  41,147
  44,721
  48,440
  52,308
  56,329
  60,508
  64,850
  69,363
  74,054
  78,931
  84,005
  89,285
  94,782
  100,508
  106,475
  112,696
  119,186
  125,959
Revenue / Adjusted assets
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
  2.089
Average production assets, $m
  1,240
  1,463
  1,709
  1,975
  2,261
  2,568
  2,894
  3,240
  3,604
  3,986
  4,387
  4,806
  5,243
  5,699
  6,173
  6,666
  7,178
  7,710
  8,264
  8,839
  9,437
  10,058
  10,705
  11,377
  12,078
  12,808
  13,568
  14,361
  15,188
  16,051
Working capital, $m
  -3,943
  -4,654
  -5,434
  -6,280
  -7,191
  -8,167
  -9,204
  -10,303
  -11,461
  -12,678
  -13,953
  -15,285
  -16,675
  -18,124
  -19,631
  -21,199
  -22,828
  -24,522
  -26,282
  -28,110
  -30,011
  -31,988
  -34,044
  -36,184
  -38,412
  -40,732
  -43,150
  -45,672
  -48,302
  -51,047
Total debt, $m
  2,347
  3,630
  5,036
  6,562
  8,206
  9,965
  11,837
  13,818
  15,908
  18,102
  20,402
  22,806
  25,313
  27,926
  30,645
  33,472
  36,411
  39,466
  42,640
  45,939
  49,368
  52,934
  56,642
  60,502
  64,520
  68,706
  73,068
  77,616
  82,360
  87,311
Total liabilities, $m
  7,112
  8,395
  9,801
  11,327
  12,971
  14,730
  16,602
  18,584
  20,673
  22,868
  25,167
  27,571
  30,078
  32,691
  35,410
  38,237
  41,177
  44,231
  47,405
  50,704
  54,133
  57,699
  61,408
  65,267
  69,285
  73,471
  77,833
  82,381
  87,125
  92,076
Total equity, $m
  2,617
  3,089
  3,607
  4,168
  4,773
  5,421
  6,109
  6,839
  7,607
  8,415
  9,261
  10,146
  11,068
  12,030
  13,030
  14,071
  15,153
  16,277
  17,445
  18,659
  19,920
  21,233
  22,597
  24,018
  25,496
  27,037
  28,642
  30,315
  32,061
  33,883
Total liabilities and equity, $m
  9,729
  11,484
  13,408
  15,495
  17,744
  20,151
  22,711
  25,423
  28,280
  31,283
  34,428
  37,717
  41,146
  44,721
  48,440
  52,308
  56,330
  60,508
  64,850
  69,363
  74,053
  78,932
  84,005
  89,285
  94,781
  100,508
  106,475
  112,696
  119,186
  125,959
Debt-to-equity ratio
  0.900
  1.180
  1.400
  1.570
  1.720
  1.840
  1.940
  2.020
  2.090
  2.150
  2.200
  2.250
  2.290
  2.320
  2.350
  2.380
  2.400
  2.420
  2.440
  2.460
  2.480
  2.490
  2.510
  2.520
  2.530
  2.540
  2.550
  2.560
  2.570
  2.580
Adjusted equity ratio
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,014
  1,167
  1,334
  1,515
  1,709
  1,916
  2,136
  2,368
  2,613
  2,870
  3,214
  3,494
  3,787
  4,092
  4,408
  4,738
  5,080
  5,436
  5,806
  6,190
  6,590
  7,005
  7,437
  7,887
  8,356
  8,844
  9,352
  9,883
  10,436
  11,014
Depreciation, amort., depletion, $m
  227
  249
  274
  300
  329
  360
  392
  427
  463
  502
  439
  481
  524
  570
  617
  667
  718
  771
  826
  884
  944
  1,006
  1,070
  1,138
  1,208
  1,281
  1,357
  1,436
  1,519
  1,605
Funds from operations, $m
  1,241
  1,416
  1,608
  1,815
  2,038
  2,276
  2,528
  2,795
  3,076
  3,371
  3,652
  3,975
  4,311
  4,661
  5,026
  5,404
  5,798
  6,207
  6,632
  7,074
  7,533
  8,011
  8,508
  9,025
  9,563
  10,124
  10,709
  11,319
  11,955
  12,619
Change in working capital, $m
  -643
  -712
  -779
  -846
  -911
  -975
  -1,038
  -1,099
  -1,158
  -1,217
  -1,275
  -1,333
  -1,390
  -1,448
  -1,507
  -1,568
  -1,630
  -1,693
  -1,760
  -1,829
  -1,901
  -1,977
  -2,056
  -2,140
  -2,228
  -2,320
  -2,418
  -2,521
  -2,630
  -2,745
Cash from operations, $m
  1,885
  2,128
  2,387
  2,661
  2,949
  3,251
  3,566
  3,894
  4,235
  4,588
  4,927
  5,307
  5,701
  6,110
  6,533
  6,972
  7,428
  7,901
  8,392
  8,903
  9,434
  9,988
  10,564
  11,165
  11,791
  12,445
  13,127
  13,840
  14,585
  15,364
Maintenance CAPEX, $m
  -104
  -124
  -146
  -171
  -197
  -226
  -257
  -289
  -324
  -360
  -399
  -439
  -481
  -524
  -570
  -617
  -667
  -718
  -771
  -826
  -884
  -944
  -1,006
  -1,070
  -1,138
  -1,208
  -1,281
  -1,357
  -1,436
  -1,519
New CAPEX, $m
  -195
  -224
  -245
  -266
  -287
  -307
  -326
  -345
  -364
  -383
  -401
  -419
  -437
  -455
  -474
  -493
  -512
  -532
  -553
  -575
  -598
  -622
  -647
  -673
  -700
  -730
  -760
  -793
  -827
  -863
Cash from investing activities, $m
  -299
  -348
  -391
  -437
  -484
  -533
  -583
  -634
  -688
  -743
  -800
  -858
  -918
  -979
  -1,044
  -1,110
  -1,179
  -1,250
  -1,324
  -1,401
  -1,482
  -1,566
  -1,653
  -1,743
  -1,838
  -1,938
  -2,041
  -2,150
  -2,263
  -2,382
Free cash flow, $m
  1,585
  1,780
  1,996
  2,224
  2,465
  2,718
  2,983
  3,259
  3,547
  3,845
  4,128
  4,450
  4,784
  5,130
  5,489
  5,862
  6,249
  6,650
  7,068
  7,502
  7,953
  8,422
  8,912
  9,421
  9,953
  10,507
  11,086
  11,691
  12,322
  12,982
Issuance/(repayment) of debt, $m
  1,164
  1,284
  1,406
  1,526
  1,644
  1,759
  1,872
  1,982
  2,089
  2,195
  2,300
  2,404
  2,508
  2,613
  2,719
  2,828
  2,939
  3,055
  3,174
  3,299
  3,429
  3,566
  3,709
  3,860
  4,018
  4,186
  4,362
  4,548
  4,744
  4,951
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,164
  1,284
  1,406
  1,526
  1,644
  1,759
  1,872
  1,982
  2,089
  2,195
  2,300
  2,404
  2,508
  2,613
  2,719
  2,828
  2,939
  3,055
  3,174
  3,299
  3,429
  3,566
  3,709
  3,860
  4,018
  4,186
  4,362
  4,548
  4,744
  4,951
Total cash flow (excl. dividends), $m
  2,749
  3,064
  3,402
  3,750
  4,109
  4,477
  4,855
  5,241
  5,636
  6,040
  6,427
  6,853
  7,291
  7,743
  8,208
  8,690
  9,188
  9,705
  10,242
  10,800
  11,382
  11,988
  12,620
  13,281
  13,971
  14,693
  15,448
  16,238
  17,066
  17,933
Retained Cash Flow (-), $m
  -425
  -472
  -517
  -562
  -605
  -647
  -689
  -729
  -769
  -808
  -846
  -884
  -923
  -961
  -1,001
  -1,041
  -1,082
  -1,124
  -1,168
  -1,214
  -1,262
  -1,312
  -1,365
  -1,420
  -1,479
  -1,540
  -1,605
  -1,674
  -1,746
  -1,822
Prev. year cash balance distribution, $m
  225
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  68
  81
  96
  112
  129
  148
  168
  190
  212
  236
  261
  288
  315
  344
  374
  405
  437
  471
  506
  542
  580
  619
  660
  702
  746
  792
  840
  890
  942
  996
Cash available for distribution, $m
  2,549
  2,592
  2,884
  3,189
  3,504
  3,830
  4,166
  4,511
  4,867
  5,233
  5,581
  5,969
  6,369
  6,781
  7,208
  7,649
  8,106
  8,581
  9,074
  9,586
  10,120
  10,676
  11,256
  11,861
  12,492
  13,153
  13,843
  14,565
  15,320
  16,111
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  2,444
  2,373
  2,510
  2,626
  2,716
  2,780
  2,814
  2,820
  2,796
  2,743
  2,650
  2,547
  2,421
  2,277
  2,116
  1,944
  1,764
  1,580
  1,397
  1,218
  1,047
  886
  738
  604
  486
  384
  297
  225
  167
  121
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

WellCare Health Plans, Inc. is a managed care company. The Company focuses on government-sponsored managed care services, primarily through Medicaid, Medicare Advantage (MA) and Medicare Prescription Drug Plans (PDPs), to families, children, seniors and individuals with medical needs. The Company operates through three segments: Medicaid Health Plans, Medicare Health Plans and Medicare PDPs. As of December 31, 2016, it served approximately 3.9 million members in 50 states and the District of Columbia. As of December 31, 2016, it operated Medicaid health plans in Arizona, Florida, Georgia, Hawaii, Illinois, Kentucky, Missouri, New Jersey, New York and South Carolina. As of December 31, 2016, it offered MA coordinated care plans (CCPs) in certain counties in Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Mississippi, New Jersey, New York, South Carolina, Tennessee and Texas.

FINANCIAL RATIOS  of  WellCare Health Plans (WCG)

Valuation Ratios
P/E Ratio 46.9
Price to Sales 0.8
Price to Book 5.7
Price to Tangible Book
Price to Cash Flow 15.2
Price to Free Cash Flow 17.6
Growth Rates
Sales Growth Rate 2.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -23.4%
Cap. Spend. - 3 Yr. Gr. Rate 11.1%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 49.9%
Total Debt to Equity 49.9%
Interest Coverage 10
Management Effectiveness
Return On Assets 4.7%
Ret/ On Assets - 3 Yr. Avg. 3.2%
Return On Total Capital 8.2%
Ret/ On T. Cap. - 3 Yr. Avg. 5.1%
Return On Equity 13%
Return On Equity - 3 Yr. Avg. 8.1%
Asset Turnover 2.5
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 4.7%
EBITDA Margin - 3 Yr. Avg. 3.4%
Operating Margin 3.7%
Oper. Margin - 3 Yr. Avg. 2.5%
Pre-Tax Margin 3.7%
Pre-Tax Margin - 3 Yr. Avg. 2.5%
Net Profit Margin 1.7%
Net Profit Margin - 3 Yr. Avg. 1%
Effective Tax Rate 54.3%
Eff/ Tax Rate - 3 Yr. Avg. 61%
Payout Ratio 0%

WCG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WCG stock intrinsic value calculation we used $17007 million for the last fiscal year's total revenue generated by WellCare Health Plans. The default revenue input number comes from 2017 income statement of WellCare Health Plans. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our WCG stock valuation model: a) initial revenue growth rate of 19.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for WCG is calculated based on our internal credit rating of WellCare Health Plans, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of WellCare Health Plans.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of WCG stock the variable cost ratio is equal to 92.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $-1 million in the base year in the intrinsic value calculation for WCG stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.3% for WellCare Health Plans.

Corporate tax rate of 27% is the nominal tax rate for WellCare Health Plans. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the WCG stock is equal to 0.4%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for WCG are equal to 6.1%.

Life of production assets of 10 years is the average useful life of capital assets used in WellCare Health Plans operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for WCG is equal to -19.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2417 million for WellCare Health Plans - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 44 million for WellCare Health Plans is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of WellCare Health Plans at the current share price and the inputted number of shares is $11.3 billion.

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COMPANY NEWS

▶ WellCare expected to get state children's health service contract   [Jun-27-18 12:07PM  American City Business Journals]
▶ WellCare joins the Civic 50 for its volunteer efforts   [Jun-20-18 06:53AM  American City Business Journals]
▶ WellCare CEO steps into national spotlight   [Jun-15-18 02:52PM  American City Business Journals]
▶ What Moody's thinks about WellCares planned $2.5 billion deal   [Jun-01-18 07:19AM  American City Business Journals]
▶ [$$] Clean Bill of Health for Insurance Deals   [May-30-18 12:14PM  The Wall Street Journal]
▶ Inside the $2.5 billion WellCare-Meridian health insurance deal   [07:38AM  American City Business Journals]
▶ [$$] Health Insurer WellCare to Acquire Meridian for $2.5 Billion   [May-29-18 06:34PM  The Wall Street Journal]
▶ WellCare buys Detroit-based health insurance firm for $2.5 billion   [05:18PM  American City Business Journals]
▶ WellCare and USF team up for study on social services patients   [May-23-18 02:15PM  American City Business Journals]
▶ WellCare Announces Appearance At Investor Conference   [May-08-18 04:30PM  PR Newswire]
▶ How Tampa Bays startup community compares to the rest of the world   [07:39AM  American City Business Journals]
▶ Why Kiran Patel is backing a Tampa company developing cancer treatments   [May-02-18 02:58PM  American City Business Journals]
▶ How WellCares expansion is expected to pay off for shareholders this year   [May-01-18 02:06PM  American City Business Journals]
▶ WellCare: 1Q Earnings Snapshot   [06:27AM  Associated Press]
▶ Kiran Patel's latest big deal is worth more than five times the sale of WellCare   [Apr-26-18 07:16AM  American City Business Journals]
▶ WellCare Announces 2017 Annual Review   [Apr-11-18 08:30AM  PR Newswire]
▶ Edited Transcript of WCG presentation 6-Mar-17 6:05pm GMT   [Apr-10-18 11:15AM  Thomson Reuters StreetEvents]
▶ Why the CEO of WellCare got a pay raise in 2017   [06:52AM  American City Business Journals]
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