WCG

[David Randolph]

WCG just needs a quarterly evaluation to see if everything goes according to my long term estimates, I'll keep holding WCG.

[David Randolph]

The inclusion in the S&P MidCap 400 index has increased volume on WCG, which is a positive. I wonder when will WCG be added to the S&P 500

I'll keep holding WCG.

[Garoh]

Next week David as I heard 

[David Randolph]

Next week David as I heard 

That would be nice Garoh, but I believe it will take more than that, since WCG is now a $3.63 B market cap and the last new constituent of the S&P 500 was a $7.93 B market cap company.

Perhaps when WCG reaches $200

Huge volume today as the stock closed at a new all time high. I'll keep holding WCG.

[David Randolph]

Analysts have been busy raising EPS estimates for WCG:



Now they're expecting EPS of $4.17 for the full year of 2007, which represents a 17.8% increase from the $3.54 reported in 2006. I believe these estimates will rise even more as time goes by and I'll keep holding WCG.

[David Randolph]

Nothing new on WCG today, perhaps it will come down a bit to close the gap opened between $86.98 and $87.5, since that gap originated from a "no fundamental development" type of news, which was:

• Standard & Poor's Announces Changes to U.S. Indices
PR Newswire (Fri, Mar 16)

I'll continue holding WCG.

[David Randolph]

Nothing new on WCG today, perhaps it will come down a bit to close the gap opened between $86.98 and $87.5, since that gap originated from a "no fundamental development" type of news, which was:

• Standard & Poor's Announces Changes to U.S. Indices
PR Newswire (Fri, Mar 16)

It did close that gap, technically ready to move back up now. I'll keep holding WCG.

[David Randolph]

WCG fell 1.29% yesterday, in tandem with the general market. I heard someone of the Congress say, and the FED chief confirmed it, that in 10 years the health care services industry will be 20% of the US economy

The US economy is "worth" about $13 T now, if it grows at an average annual pace of 2.5% it will be a $16.6 T economy in 2017, so 20% of this is $3.33 T.

WCG, also from what you can read on previous analysis in this thread, has the potential to be a $100 B plus market cap company. It is $3.55 B now. I'll keep holding WCG.

[David Randolph]

I'm not going to fall into the trap of trying to read too much out of today's movement. WCG went down because it was up a lot over the previous months. It is now approaching the support given by the ascending trendline and the 50 days SMA.

I'll continue holding WCG for the long term.

[David Randolph]

As you can see on the table below, WCG's fundamental improvement is outstanding, with revenues growing 18% a quarter and gross margin more than doubling in five quarters:



I see this rapid growth continuing for years to come and I'll keep holding WCG.

[David Randolph]

WCG's revenues grew every quarter since inception:



It doesn't get much more reliable than this. And growth has been very strong, at 11.6% a quarter, on average

I'll keep holding WCG.

[David Randolph]

Today, instead of revenues in absolute terms, I want to know about the Rate of change of revenues, sequentially on a quarterly basis:



Revenues are growing at a 11.6% average quarterly rate, but that growth accelerated in 2006, with 42.7% growth in Q1 2006, 16.2% in Q2 (from Q1 level, please note that), 15% in Q3 and 15.1% in Q4.

This makes WCG one of the fastest growers of the Main Portfolio, with a 98% revenue jump in 2006 (only beaten by GIGM with 113% growth).

I'll keep holding WCG.

[David Randolph]

WCG is still playing around the $90 resistance level, but fundamentals say the stock is worth a lot more than that, so it's just a matter of when, not if, the stock pushes towards $100. Anyway, I would like to apply my new valuation model to WCG to know what would the optimal selling price be, given the current fundamental trends. I'll do that over the weekend, I have to be quick making these updates now so I can complete the 10 page course in fundamental analysis faster.

I'll keep holding WCG.

[David Randolph]

I would like to apply my new valuation model to WCG to know what would the optimal selling price be, given the current fundamental trends. I'll do that over the weekend ...

To get reasonable estimates to the four variables of the valuation model, I need to study four graphs with basic fundamental information. Today I'll design the first graph for WCG, which is the "Share Count & Market Cap evolution":



As we can see, the share count compound annual growth rate (CAGR), has been 2% since the company's IPO in 2004. So, 1.02 seems like a reasonable estimate for our first working variable, the "dilution factor".

But, to get to this estimate I also like to study the balance sheet, to see if the short term liquidity picture is healthy (I'm sure it is), not showing the need for private placements and stuff like that. We'll do that over the next update.

In the meantime, I'll keep holding WCG.

[Dory99]

Hi David,

  If you don't mind, could I ask you the source/service you use to get the historical share count information? Your valuation approach is excellent!