WellPoint (WLP) has decided that it’s time to change its name. Once shareholders approve, the company formerly known as WellPoint will be officially known as Anthem.Susquehanna’s Chris Rigg and team call the decision a “prudent move.” They explain why:
WellPoint announced it intends to change its corporate name to Anthem Inc…Although it’s difficult to measure the financial impact of the name change, we think it’s a prudent move from a marketing standpoint. The name change is driven by the industry selling more coverage directly to individuals rather than through more traditional commercial channels. We believe the ability to market under a single brand name should help streamline advertising costs and should increase brand awareness over time.
Shares of WellPoint have gained 1.5% to $110.26 at 12:38 p.m. today but that appears to reflect strength in the sector rather than investor enthusiasm over the name change. Unitedhealth (UNH), for instance, has risen 1.3% to $81.24, Aetna (AET) has advanced 1.7% to $76.72 and Humana (HUM) is up 1.4% to $119.04.
Date: August 13, 2014