Heartland Advisors, an investment management company, released its “Heartland Mid Cap Value Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. In the first quarter, the portfolio returned 3.07% compared to a 1.32% gain for the Russell Midcap Value Index. During the quarter the company shifted its focus to beaten-down shares of well-run businesses believing that it would benefit if the market became less fearful of the business cycle. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Heartland Mid Cap Value Fund highlighted stocks like Centene Corporation (NYSE:CNC) in the first quarter 2023 investor letter. Headquartered in St. Louis, Missouri, Centene Corporation (NYSE:CNC) is a healthcare enterprise that operates through Managed Care and Specialty Services segments. On April 12, 2023, Centene Corporation (NYSE:CNC) stock closed at $67.18 per share. One-month return of Centene Corporation (NYSE:CNC) was 6.31%, and its shares lost 22.37% of their value over the last 52 weeks. Centene Corporation (NYSE:CNC) has a market capitalization of $36.996 billion.
Heartland Mid Cap Value Fund made the following comment about Centene Corporation (NYSE:CNC) in its Q1 2023 investor letter:
“Health Care. During the quarter, we added to our existing position in Centene Corporation (NYSE:CNC), one of the largest managed health care insurance providers in the U.S. and the largest player in Medicaid.
The stock has underperformed lately, as CNC faces headwinds on the reimbursement front, including a reduction in its 2024 Medicare Advantage reimbursements. The market also seems to fear a potential loss of insured lives when Medicaid eligibility, which was expanded during the pandemic, gets redetermined in 2023-2024.
CNC hasn’t historically delivered consistent results compared to other premier managed care companies. More recently, the company upgraded its leadership ranks, including the addition of a CEO, CFO, and COO from better-managed companies with a track record of value creation. The company is undertaking a series of self-help efforts, including expense reductions, divesting noncore assets, share buybacks, and operational improvements.
Despite this, the stock trades at just 10 times 2023 earnings and 9 times 2024 profits. We consider that valuation too punitive for a company that we expect to continue growing EPS at a 12-15% compound annual growth rate.”
Centene Corporation (NYSE:CNC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held Centene Corporation (NYSE:CNC) at the end of the fourth quarter which was 61 in the previous quarter.
We discussed Centene Corporation (NYSE:CNC) in another article and shared the list of eyecare stocks with upside potential. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
