Tuesday, 27 February 2007

The Howard Group Ends Coverage of WellPoint

All things must pass as has our relationship with WellPoint.

While we will no longer be writing about or representing the Company, The Howard Group remains of the mind that eventually WellPoint will be recognized by the market for its progress over the past couple of years.

In regards to the past year in particular, we have been impressed with WPS' consecutive quarters of growth, turning and remaining earnings positive during 2006 as well as Management's ability to close the key IDEAS acquisition. This gave WellPoint more than a stepping stone into global markets.
As we depart, an outstanding matter is the proposed U.S. acquisition of Bolo. While it was to close by December 31, clearly this was overly optimistic based on the deal falling in the middle of the holiday season. However, here we are near the end of February and clearly there is an issue with Quorum, which was to find the funding for the $20+ million deal.

Today, the stock price continues to languish in the $0.40 range as the market is eagerly waiting news on the Bolo acquisition. We know from communications to the offices of The Howard Group, that major buying and/or selling decisions are tied to what happens with this proposed acquisition.
Keep in mind that while WPS is growing quickly it still is a small company (especially in terms of market capitalization) and requires investor patience. As long as quarter over quarter the per share financial results keep improving it is only a matter of time until the value becomes too far disconnected with the company's progress and the stock begins trading at higher levels.

We wish them well in the closing of the acquisition and in the future.