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Amerigroup Takeover a Big Nod to Obama by WellPoint

7/9/2012
By David Urani, Research Analyst

One of the big stories today is the takeover announcement by WellPoint (WLP) to buy Amerigroup (AGP) for $4.5 billion (more than a 40% premium). This of course is shortly after the upholding of Obamacare, and it's easy to see that this is a show of confidence by WellPoint that increased business is coming in the area of government programs, particularly Medicaid.

Naturally, big takeovers boost industry peers and in this case the response is enormously positive. Take a look at the gains on WellCare (WCG), Centene (CNC) and Molina (MOH), each of which is up in the teens-percentages at the time of this article. Each of these companies does Medicaid-related business. Not only are they now being seen as viable takeover candidates, but as I said before WellPoint is signaling that the Obamacare ruling gives this market the green light.

David Urani
Wall Street Strategies

Charles Payne, Wall Street Strategies CEO, appears every week on FOX News Business shows including Bulls & Bears, Cashin' In, Cavuto and FOX and Friends.

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