Why WebMD Health Corp. Shares Looked Healthier Today

Is this meaningful? Or just another movement?

Apr 14, 2014 at 2:07PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of health information provider WebMD Health Corp. (NASDAQ:WBMD) surged 20% today after its first-quarter update topped Wall Street expectations.

So what: The stock had pulled back sharply in recent months on short-term valuation concerns, but today's better-than-expected Q1 update reignites optimism over WebMD's long-term growth potential. In fact, the company said that monthly traffic to its health network spiked 32% to 174 million unique users, while page views surged 26% to 3.5 billion, giving Wall Street plenty of good vibes over its monetization prospects going forward.

Now what: Management now expects its Q1 adjusted EBITDA to be slightly above the high end of its previously forecast range of $28.5 million-$30.5 million on sales, which should also be higher than its prior view. "The update to our guidance that we are providing today reflects recent improvements in our sales activity compared to our experience in the early weeks of 2014," said CEO David Schlanger. "We are having very positive dialogue with our customers about how WebMD can help address their evolving business needs and we are continuing our investments in new product and service offerings to better serve those needs and realize future growth opportunities."

Of course, when you couple today's big share-price spike with WebMD's still-questionable competitive moat, I'd wait for a much wider margin of safety before buying into that bullishness.

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Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

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This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

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Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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