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WellPoint's Profit, Membership Shrinks-WSJ

|Includes: Anthem, Inc. (ANTM)

Wellpoint's (WLP) earnings decreased but beat expectations this morning. The company raised its full-year earnings estimate to at least $7.65 meaning that at $71.77 the stock is trading at just over 9 times earnings. Wellpoint is a cash flow machine and management consistently buys back stock, and because the valuation is reasonable, the buybacks are accretive to both earnings and intrinsic value. We've sold some puts on Wellpoint as we'd like to own a bit cheaper than it currently trades, but we do believe Wellpoint is one of the more attractive names in the healthcare sector, particularly amongst the HMO's.

Disclosure: I am long WLP.