WellPoint (NYSE:ANTM) is up today after reporting that net income dropped 21%.
That wasn't a typo. Net income declined substantially due to higher SG&A expenses, but still beat analyst expectations significantly.
And those expenses increased because of a strong influx of new members -- 1.3 million, to be exact. So that news actually isn't as bad as it originally sounded.
WellPoint also reported that it was better able to control for its members' medical costs -- the benefit expense ratio (which measures the percentage of premium revenue paid out in medical expenses) declined from 84% to 83% -- a great sign considering that cost discipline is going to be critical to preserve long term profitability, especially with those blooming SG&A expenses.
So, after today's rise, and considering all of the uncertainty and regulation swirling around the insurance industry, should investors consider buying today? Michael thinks so. Watch the video below to find out why.
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Mark Reeth and Michael Douglass have no position in any stocks mentioned. The Motley Fool owns and recommends shares of WellPoint. 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.