Stock Idea: WellPoint (WLP, $64.48)

(May 16, 2011 update: All future stock posts will appear on my new subscription-only website at www.GoodfellowLLC.com. Please visit!)

WellPoint (WLP) is a health benefits company serving over 30 million medical members. Earnings per share are projected to fall slightly in 2011 by 2.7% to $6.56 per share, then increase in the next two fiscal years by 11.0% and 8.1%. The PE is quite low at 9.0. Is there room for the PE to expand now that a Federal judge declared that citizens' mandatory purchases of Obamacare is unconstitutional, and there is less risk that Obamacare will put medical insurance companies out of business? I would think so.

The stock price looks like it's ready to rise above the recent $48-$65 range, possibly retracing its former high of $90 before the stock fell with the financial meltdown of 2008.

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