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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (48523)	7/1/2012 11:53:40 AM
From: Spekulatius	2 Recommendations Respond to of 78744

Re WLP - I agree with you that access to healthcare should be provided and the USA is the only ndustrilized country that hasn't done this so far. The cost of health care in the USA is roughly 2x of the same service in other comparable countries in Europe per my experience. that said, even with universal health care, there is a police for private insurers like WLP. In any case, WLP is more of a service or pass through organization than an insurer. they pay out about 83-84% of their premiums, ~13-14% goes into G&A and some investment income ( from the customer funds they hold) and the small insurance margin provide the margin. It is u likely, that an non-profit would be more efficient. What is inflated, is not WLP administrative side, it is the service cost. That said, WLP buy back are remarkable - the share count peaked in 2005/2006 at about 620M shares ( after an acquisition spree) and now they are down to 330M shares. Basically, they are doing what Teledyne has done in it's days. The revenues have not moved in all in all those years, but in terms of per share data, the growth has been quite nice, compounded over 10% annually, and the value proposition is that the shares have treated water, so the stock is now way cheaper than it used to be. I think this has to do with the infatuation for dividends rather than buybacks, people like to do dividend re-investing but here we have a compounder that is cheap and beats any utility that I am aware of, yet people yawn even here in a value forum when I bring it up. Even better WLP has started to pay a dividend as well, and I expect it to grow fairly fast. I think this may draw the attention of the dividend invested crowd at some point.