6. Centene Corporation (NYSE:CNC)
Number of Hedge Fund Holders: 48
Forward P/E as of October 23, 2024: 8.95
10 Year Revenue Growth Rate: 27.5%
Trailing 12 Month (TTM) Net Income (June 30): $2.82 Billion
Centene Corporation (NYSE:CNC) is a managed care company that is based in Missouri, United States. The company provides high-quality healthcare to families and individuals. The company has 28.5 million managed care members, amounting to 1 in 15 individuals across the nation. Its products and services include Medicaid, medicare, and health insurance.
In the second quarter of 2024, Centene Corporation (NYSE:CNC) logged $39.84 billion in revenue, up by nearly 5.9%. The company attributes its revenue growth to its diversified portfolio, which helped the company stay on track. In addition to that, the company is working to improve its offerings and deliver long-term profitability through operational efficacy.
From recognitions to partnerships, the second quarter of 2024 has been quite a feat for Centene Corporation (NYSE:CNC). To align with its goal of expansion and to maintain its growth trajectory, on October 2, Ambetter Health, its health insurance business, shared plans to expand to 60 new counties in the United States. In 2024, the segment stood as one of the biggest health insurance businesses, providing insurance to over 4.4 million members.
Overall, Centene Corporation (NYSE:CNC) is one of the best value stocks to invest in, explaining why 48 hedge funds were bullish on the stock at the close of Q2 2024, according to Insider Monkey’s database. The stock is also cheap, trading at 9 times forward earnings, a discount of 58% to the sector median. Additionally, analysts polled by Yahoo Finance expect the stock to grow its earnings by slightly over 2% this year.
Harris Associates’ Oakmark Select Fund stated the following regarding Centene Corporation (NYSE:CNC) in its Q2 2024 investor letter:
“Centene Corporation (NYSE:CNC) is one of the largest health insurers in the U.S. The company specializes in three major government-sponsored programs: Medicaid, Marketplace and Medicare Advantage, each of which benefits from long-term secular tailwinds. In Medicaid, states are steadily outsourcing their programs to companies like Centene to reduce costs and improve care quality. Managed Medicaid penetration has increased throughout the past decade and we expect further gains over time. In Marketplace, growth is driven by the trend toward more individuals buying health insurance. Centene holds the #1 market share in both of these programs and is well positioned to capitalize on their continued growth. Finally, we believe management is successfully turning around Centene’s Medicare business and expect the division to generate positive earnings over time. After adjusting for losses stemming from Centene’s Medicare business, we were able to purchase shares at a single-digit P/E multiple, which we think is too cheap for a leading, secularly growing Medicaid company and an improving Medicare business.”
