Oakmark Funds, advised by Harris Associates, released its “Oakmark Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned 2.04% in the fourth quarter, compared to a 2.41% return for the S&P 500 Index. The fund has returned 12.82% since its inception compared to the index return of 10.67% over the same period. The largest contributors to the fund for the quarter were financials and communication services while health care and materials detracted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Oakmark Fund highlighted stocks like Centene Corporation (NYSE:CNC) in the Q4 2024 investor letter. Centene Corporation (NYSE:CNC) is a healthcare enterprise that offers services to under-insured and uninsured families, commercial organizations, and military families. The one-month return of Centene Corporation (NYSE:CNC) was 5.87%, and its shares lost 19.17% of their value over the last 52 weeks. On January 14, 2025, Centene Corporation (NYSE:CNC) stock closed at $63.40 per share with a market capitalization of $32.16 billion.
Oakmark Fund stated the following regarding Centene Corporation (NYSE:CNC) in its Q4 2024 investor letter:
“Centene Corporation (NYSE:CNC) was the top detractor during the quarter. The U.S.-headquartered managed health care company’s stock price declined despite releasing third-quarter results that showed resilient fundamentals in the face of short-term industry pressure. Centene also issued above-consensus guidance for 2025 earnings per share (EPS) at its December investor day. We believe the largest driver of the stock price decline in the quarter was investor concern around how legislative changes following the recent U.S. presidential election could impact the company. In our view, this unease is overly discounted into the share price. We see Centene as having significant embedded earnings power that can drive continued EPS growth even with a less accommodative political backdrop. Shares trade at less than 9x 2025 EPS guidance, which we think is an attractive valuation for a business that generates healthy returns on capital and operates in a secularly growing industry.”
A doctor holding a clipboard in a hospital ward, discussing patient treatment plan with the nurses.
Centene Corporation (NYSE:CNC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held Centene Corporation (NYSE:CNC) at the end of the third quarter which was 48 in the previous quarter. While we acknowledge the potential of Centene Corporation (NYSE:CNC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Centene Corporation (NYSE:CNC) and shared Heartland Mid Cap Value Fund’s views on the company. In addition, please check out our hedge fund investor letters Q4 2024 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.