Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, health plan operator WellPoint (NYSE:WLP) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at WellPoint's business and see what CAPS investors are saying about the stock right now.

WellPoint facts

Headquarters (founded)

Indianapolis, Indiana (1944)

Market Cap

$18.7 billion


Managed Healthcare

TTM Revenue

$61.7 billion


CEO Angela Braly (since 2007)

CFO Wayne Deveydt (since 2007)

Return on Equity (average last three years)



UnitedHealth (NYSE:UNH),

Aetna (NYSE:AET)

CAPS members bullish on WLP also bullish on

Johnson & Johnson (NYSE:JNJ),

General Electric (NYSE:GE)

CAPS members bearish on WLP also bearish on

Humana (NYSE:HUM),

General Motors (NYSE:GM)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 683 of the 729 members who have rated WellPoint -- some 94% -- believe the stock will outperform the S&P 500 going forward. These bulls include 7iles and CAPS All-Star athenamike.

In September, 7iles touched on the supertrend working in WellPoint's favor: "The companies specialising in healthcare will benefit from the combination of an aging population (ie. baby boomers reaching 65) and longer life expectancies."

A pitch from athenamike late last month agrees, breaking down the stock's seemingly bargain-basement valuation:

Wellpoint is one of the two biggest health insurers in the US and has considerable competitive advantages of scale, supplier and buyer power. I'm not certain, but my guess is that its price is trading based on short term investment, insurance pricing and political considerations, instead of long term investment, insurance pricing and political considerations. I expect the business to produce 13.5% returns on equity over the next five years and provide 12% growth, leading to very strong long term returns when priced at 6 times normalized earnings.

What do you think about WellPoint, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. WellPoint and UnitedHealth are Motley Fool Inside Value picks. UnitedHealth is also a choice of Stock Advisor. Johnson & Johnson is an Income Investor recommendation. The Fool owns shares of UnitedHealth. The Fool's disclosure policy always gets a perfect score.