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This Metric Says You Are Smart to Sell Centene Corp (CNC)

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Is Centene Corp (NYSE:CNC) a buy?

Now, according to many market players, hedge funds are assumed to be delayed, outdated investment vehicles of an era lost to time. Although there are more than 8,000 hedge funds trading today, this site focuses on the upper echelon of this club, around 525 funds. Analysts calculate that this group has its hands on most of the smart money’s total assets, and by monitoring their best equity investments, we’ve found a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as key, positive insider trading sentiment is a second way to analyze the stock market universe. As the old adage goes: there are a variety of reasons for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this strategy if “monkeys” understand what to do (learn more here).

Keeping this in mind, we’re going to study the latest info about Centene Corp (NYSE:CNC).

Centene Corp (NYSE:CNC)

What does the smart money think about Centene Corp (NYSE:CNC)?

At Q2’s end, a total of 20 of the hedge funds we track were bullish in this stock, a change of -9% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully.

When using filings from the hedgies we track, Daruma Asset Management, managed by Mariko Gordon, holds the most valuable position in Centene Corp (NYSE:CNC). Daruma Asset Management has a $65.8 million position in the stock, comprising 3.2% of its 13F portfolio. Sitting at the No. 2 spot is Roberto Mignone of Bridger Management, with a $40.6 million position; the fund has 3% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Jim Simons’s Renaissance Technologies, Charles Clough’s Clough Capital Partners and Samuel Isaly’s OrbiMed Advisors.

Due to the fact Centene Corp (NYSE:CNC) has experienced declining interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of money managers who were dropping their full holdings in Q1. It’s worth mentioning that Daniel Arbess’s Xerion cut the biggest position of the “upper crust” of funds we watch, comprising close to $4.9 million in stock. Mark Kingdon’s fund, Kingdon Capital, also dumped its stock, about $0.8 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 2 funds in Q1.

How have insiders been trading Centene Corp (NYSE:CNC)?

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time frame, Centene Corp (NYSE:CNC) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Centene Corp (NYSE:CNC). These stocks are Coventry Health Care, Inc. (NYSE:CVH), Magellan Health Services Inc (NASDAQ:MGLN), Molina Healthcare, Inc. (NYSE:MOH), WellCare Health Plans, Inc. (NYSE:WCG), and Health Net, Inc. (NYSE:HNT). This group of stocks are the members of the health care plans industry and their market caps are closest to CNC’s market cap.

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