5 Best Healthcare Stocks to Buy According to Billionaire Larry Robbins

4. Centene Corporation (NYSE:CNC)

Glenview Capital Management’s Stake Value: $90,822,000

Percentage of Glenview Capital Management’s 13F Portfolio: 2.27%

Number of Hedge Fund Holders: 58

Centene Corporation (NYSE:CNC) has been one of the few large-cap stocks from the healthcare sector that has shown resilience amid a drastic pullback by the broader market this year. Although the stock is down marginally by 2% year-to-date, it still boasts a gain of over 28% over the previous 12 months. However, despite the resilience and outperformance of the stock, Glenview Capital Management has been reducing its stake in the company over the past few quarters. The fund disclosed a stake in the company for the first time in its 13F filing for the second quarter of 2021. It upped its stake in the next quarter by 5% but has brought it down by 36%, 19% and 2% consecutively in the last three quarters.

Recently, Centene Corporation (NYSE:CNC) was amongst the frontrunners expected to win contracts for the delivery of commercial managed care plans in California starting in 2024. Although the company managed to win contracts for some counties, analysts at Wells Fargo & Company were not impressed. On August 26, they released a note downgrading the stock to ‘Equal Weight’ from ‘Overweight’ and also lowered their price target on it to $99 from $103. In the research note, the analysts emphasized:

“…the awards represent pretty close to a worst-case outcome for CNC with the crown jewel of the CA Medicaid program (Los Angeles county) set to transition from CNC to MOH….Conversely, for MOH the awards represent a best-case outcome and are actually more meaningful for MOH than CNC given the significant difference in revenue.”