Remember when Wall Street downgrades a stock and says their is no catalyst for it to move up, it just means that the stock is going to move up, but the analyst is lacking the foresight to see it.
Last night it was reported that WellCare (WCG 38.24) only had to pay $35.2 million for the investigation in it's Florida Medicaid health contracts.
http://biz.yahoo.com/rb/080818/wellcare_payment.html?.v=1
The stock looks to trade at 46 in the pre-market.
You had the story here when the stock was downgraded by S&P to 23 just a few weeks ago. The analyst said there was "no catalyst." No catalyst? The stock just doubled in three weeks!
http://aaronandmoses.blogspot.com/2008/07/managed-care-buy-em.html
Back in December I went down to the court house in Tampa, and took a look at the documents in the raid, and I found nothing to write home about, just something to blog about.
http://aaronandmoses.blogspot.com/2007/12/well-cared-hadrosaur.html
And the $35 million that they paid isn't new news either. You had that story in the WSJ on November 6. That was the total amount that was overbilled in Medicaid. And that's all the Fed had. This information was available last year. But if an investigator doesn't have anything but what is already known, the rule of the investigation is too just drag it out to make it painful.
And now, WCG can't get the multiple expansion, because the market for healthcare stocks is vastly different than when the stock was at new highs.
But at least now they could at least get a bid!
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