WCG investors dump it for better alternatives
18 Dec, 201813 min read
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WELLCARE HEALTH PLANS, INC. has destroyed investor wealth on Tuesday. It lost -2.93% to close at 230.0. It is currently trading -28% below it's 52 week high of 321.88.
WCG is currently in a down trend. The current bearish signal has generated a profit of +22.38% for investors in the last three months.
WCG has been underperforming the SP500 index in recent time, after having outperformed till 16 Oct, 2018. Over the last 2 years 11 months and 14 days, WCG outperformed the SP500 index on 54% days.
During the last three months WCG was mostly loss making and delivered on average -0.42% per day. It's best return during this period (of +7.3%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -4.92%) was on Monday, 19 Nov, 2018. There was initially a bearish trend during this period which started on 26 Oct, 2018 and went on till 2 Nov, 2018. The trend delivered -15.38% losses to investors. This was followed by a bullish trend that started on 21 Nov, 2018 and ended on 26 Nov, 2018. This bullish trend delivered +6.02% to investors.
WCG had 7 profitable and 5 loss making months over the last year. During the last year, WCG underperformed SP500 index on monthly return basis. WCG was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.26% compared to -7.75% returned by SP500 index in Dec 2018. WCG and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both WCG and SP500 index significantly outperform during months when quarterly/annual results are announced.
Never invest emergency savings in the stock market.
-- Suze Orman
WCG is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in WCG's volatility from 21 Sep, 2018 to 7 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that WCG has significant positive skewness in it's return distribution. This indicates that investors can expect WCG to recover from drawdowns quickly. Which makes WCG a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
SP500 index has more chance of extreme outcomes than WCG. Therefore, SP500 must receive a lower allocation than WCG in your portfolio. SP500 index usually has shorter drawdown period than WCG.
On a general note (since you are interested in WCG), ABMD is a mid cap that deserves to be closely tracked for investment opportunities.
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