What Falling Estimates & Price Mean for WellCare Health Plans (WCG) - Tale of the Tape

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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 2 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 $4.21 a share a month ago to its current level of $2.27.

Also, for the current quarter, WellCare Health Plans has seen 3 downward estimate revisions versus 4 revisions in the opposite direction, dragging the consensus estimate down to $1.26 a share from $1.43 over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 15.34% 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 Molina Healthcare, Inc. ( MOH ), Aetna Inc. ( AET ) and Centene Corp. ( CNC ). Among these stocks, Molina Healthcare holds a Zacks Rank #1 (Strong Buy) and Aetna and Centene hold a Zacks Rank #2 (Buy). With favorable Zacks Rank, these stocks may be better selections at this time. 

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WELLCARE HEALTH (WCG): Free Stock Analysis Report

MOLINA HLTHCR (MOH): Free Stock Analysis Report

AETNA INC-NEW (AET): Free Stock Analysis Report

CENTENE CORP (CNC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks

Referenced Stocks: WCG , MOH , AET , CNC

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