Hedge Funds Aren’t Crazy About Centene Corp (CNC) Anymore

Centene Corp (NYSE:CNC) was in 22 hedge funds’ portfolio at the end of the first quarter of 2013. CNC shareholders have witnessed a decrease in enthusiasm from smart money in recent months. There were 24 hedge funds in our database with CNC holdings at the end of the previous quarter.

In today’s marketplace, there are a multitude of methods shareholders can use to track the equity markets. Some of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can outperform the broader indices by a healthy amount (see just how much).

Just as key, bullish insider trading sentiment is another way to parse down the marketplace. Just as you’d expect, there are many motivations for an executive to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this tactic if investors know where to look (learn more here).

Now, we’re going to take a glance at the recent action encompassing Centene Corp (NYSE:CNC).

How are hedge funds trading Centene Corp (NYSE:CNC)?

Heading into Q2, a total of 22 of the hedge funds we track were bullish in this stock, a change of -8% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially.

According to our comprehensive database, Daruma Asset Management, managed by Mariko Gordon, holds the largest position in Centene Corp (NYSE:CNC). Daruma Asset Management has a $53.9 million position in the stock, comprising 2.7% of its 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $35.9 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Charles Clough’s Clough Capital Partners, Steven Cohen’s SAC Capital Advisors and Israel Englander’s Millennium Management.

Seeing as Centene Corp (NYSE:CNC) has faced a declination in interest from the aggregate hedge fund industry, we can see that there were a few hedgies who were dropping their full holdings last quarter. Intriguingly, Keith Meister’s Corvex Capital cut the biggest stake of all the hedgies we watch, comprising an estimated $15.3 million in stock.. Donald Chiboucis’s fund, Columbus Circle Investors, also said goodbye to its stock, about $13.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 2 funds last quarter.

Insider trading activity in Centene Corp (NYSE:CNC)

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the last six-month time period, Centene Corp (NYSE:CNC) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Centene Corp (NYSE:CNC). These stocks are Coventry Health Care, Inc. (NYSE:CVH), Magellan Health Services Inc (NASDAQ:MGLN), Molina Healthcare, Inc. (NYSE:MOH), WellCare Health Plans, Inc. (NYSE:WCG), and Health Net, Inc. (NYSE:HNT). This group of stocks are the members of the health care plans industry and their market caps match CNC’s market cap.