Should You Hold Centene (CNC)?

Hotchkis & Wiley, an investment management company, released its “Hotchkis & Wiley Mid-Cap Value Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter of 2025, equity markets posted strong gains with the S&P 500 Index, Nasdaq Composite, Dow Jones Industrial Average, and Russell 2000 Index hitting all-time highs. Enthusiasm over artificial intelligence (AI), a long-awaited Federal Reserve rate cut, and stronger-than-expected corporate earnings supported the investor sentiments in the quarter. The fund outperformed the Russell Midcap Value Index in the third quarter, gaining 7.74% vs 6.18% for the index. Please review the fund’s top 5 holdings to gain insight into their key selections for 2025.

In its third-quarter 2025 investor letter, Hotchkis & Wiley Mid-Cap Value Fund highlighted stocks such as Centene Corporation (NYSE:CNC). Centene Corporation (NYSE:CNC) is a healthcare enterprise that offers services to under-insured and uninsured families and commercial organizations. The one-month return of Centene Corporation (NYSE:CNC) was 5.19%, and its shares lost 33.08% of their value over the last 52 weeks. On December 09, 2025, Centene Corporation (NYSE:CNC) stock closed at $38.08 per share, with a market capitalization of $18.717 billion.

Hotchkis & Wiley Mid-Cap Value Fund stated the following regarding Centene Corporation (NYSE:CNC) in its third quarter 2025 investor letter:

“Centene Corporation (NYSE:CNC) is a managed care organization focused on the managed Medicaid market, with ~28 million at-risk health insurance enrollees. CNC shares fell during the quarter following its most recent quarterly earnings report that was worse than expected. At ~4.8x normal earnings, we believe CNC is attractive as the clear market leader in a business in which scale is a significant competitive advantage. The Medicaid market should grow faster than the economy as a whole: CMS forecasts Medicaid spending to grow 6% per year 2020-2027, driven by spending per member growth. Centene can grow with minimal requirements for invested capital.”

Centene (CNC) Falls 11.1% on Investor Caution Ahead of Q2

Centene Corporation (NYSE:CNC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Centene Corporation (NYSE:CNC) at the end of the third quarter, which was 59 in the previous quarter. While we acknowledge the risk and potential of Centene Corporation (NYSE:CNC) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Centene Corporation (NYSE:CNC) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Centene Corporation (NYSE:CNC) and shared Carillon Scout Mid Cap Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 2025 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.