WellCare Health Plan
WCG
Delayed Nyse - 07/21 10:02:02 pm
183.87USD
+0.05%

Towards the breakout of a major resistance level

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Jordan Dufee
 

Strategy published on : 07/13/2017 | 14:09

long trade
Live

Entry price : 182.34$
Target : 210$
Stop-loss : 172$
Potential : 15.17%

Below the resistance zone that is currently being tested, the potential for new gains appears limited for shares in WellCare Health Plans, Inc.. The stock's technical chart pattern suggests however that the level will be broken.
Summary

● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.

● In a short-term perspective, the company has interesting fundamentals.


Strengths

● The company is in a robust financial situation considering its net cash and margin position.

● There is high visibility into the group's activities for the coming years. Outlooks on future revenues from analysts covering the equity remain similar. Such hardly dispersed estimates support highly predictable sales for the current and upcoming fiscal years.

● The stock, which is currently worth 2017 to 0.34 times its sales, is clearly overvalued in comparison with peers.

● Upward revisions of sales forecast reflect a renewed optimism among the analysts covering the stock.

● Over the past year, analysts have regularly revised upwards their sales forecast for the company.

● The tendency within the weekly time frame is positive above the technical support level at 144.73 USD


Weaknesses

● The share is close to its long-term resistance in weekly data. Therefore, the potential should be limited. However, a further bullish movement when crossing this resistance will be a positive signal.

● The stock is currently in contact with a medium-term resistance that must be gotten rid of so as to resume the upward trend.

● The company's earnings releases usually do not meet expectations.

● The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 30.11 times its estimated earnings per share for the ongoing year.

Zonebourse.com 2017
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