4. Centene Corporation (NYSE:CNC)
Number of Hedge Fund Holders: 60
Centene Corporation (NYSE:CNC) is a Missouri-based multinational healthcare company that offers programs and services to under-insured and uninsured individuals in the United States. The company’s Managed Care division provides health coverage to patients through state subsidized programs, including Medicaid, the State children’s health insurance program, foster care, and medicare-medicaid plans. The stock has climbed about 16% year-to-date as of August 12. Centene Corporation (NYSE:CNC) will benefit from the Inflation Reduction Act, which includes a three-year extension of enhanced financial aid for insurers.
On July 26, the company posted above consensus earnings and revenue for Q2 2022, and also raised its guidance for the year. The company expects full year 2022 adjusted EPS to range between $5.60 to $5.75, versus a consensus EPS estimate of $5.61. Centene Corporation (NYSE:CNC) anticipates total revenue of between $141.6 billion and $143.6 billion, compared to a consensus of $142.66 billion.
Barclays analyst Steve Valiquette reinstated coverage of Centene Corporation (NYSE:CNC) on July 28 with an ‘Overweight’ rating and a $107 price target after the company’s Q2 earnings presentation and the conclusion of the PANTHERx divestiture. Centene Corporation (NYSE:CNC) has been working to enhance margins and add shareholder value while improving the managed care experience for members, the analyst told investors.
According to Insider Monkey’s Q1 data, 60 hedge funds were long Centene Corporation (NYSE:CNC), up from 53 funds in the prior quarter. Andreas Halvorsen’s Viking Global is the leading stakeholder of the company, with 7.80 million shares worth over $657 million.
FPA Capital Fund highlighted a few stocks in its Q3 2020 investor letter and Centene Corporation (NYSE:CNC) was one of them. Here is what it said:
“CNC was the Fund’s 2nd worst performer for the quarter. The company is a managed care organization (discussed in more detail in prior commentaries). The stock declined on election uncertainty and on the increased likelihood that the Supreme Court might strike down the Affordable Care Act due to the death of Supreme Court Justice Ginsburg. CNC does have the headline risk, but the stock is trading at 10x 2021 price to earnings multiple versus its long term historical average of 16x. 6 Its COVID-19 costs appear to be in line with expectations and the worst long term effect from a repeal of the Affordable Care Act is estimated to be a 10% hit to earnings. 7 We believe that any likely political scenarios would not cause a major long-term disruption to the company while its valuation appears to price in a much more dire scenario.”
