Heartland Advisors, an investment management company, released its “Heartland Mid Cap Value Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. Investors remained cautious going into the quarter as the Federal Reserve initiated its first rate-cutting cycle since the global pandemic, inflationary pressures seemed to be decreasing, and the probability of a recession appeared to be fading. The fund was down 5.50% in the quarter compared to 1.75% fall for the Russell 2000 Value Index. Stock selection was positive in Consumer Discretionary, Materials, and Consumer Staples sectors. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Heartland Mid Cap Value 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 10.19%, and its shares lost 19.17% of their value over the last 52 weeks. On January 13, 2025, Centene Corporation (NYSE:CNC) stock closed at $63.70 per share with a market capitalization of $32.16 billion.
Heartland Mid Cap Value Fund stated the following regarding Centene Corporation (NYSE:CNC) in its Q4 2024 investor letter:
“One of our worst-performing holdings in the quarter was Centene Corporation (NYSE:CNC), a giant managed health insurer that provides coverage to 25 million Americans, including 14 million Medicaid enrollees in 30 States. Given our significant exposure to the stock, CNC was the largest drag on performance during the period, but we remain committed to this holding.
The stock suffered a one-two punch this year: First, it underperformed due to an ongoing ‘price vs. cost’ margin squeeze related to high utilization from Medicaid enrollees after a two-year process of redetermining program eligibility. Medicaid is by far the most meaningful segment of Centene’s business. The stock received another blow more recently on negative sentiment after the election on the theory that CNC’s Affordable Care Act health exchange business, which represents the company’s second-largest business line, may not enjoy as much support under a Trump White House and GOP-controlled Congress…” (Click here to read the full text)
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 the list of cheap healthcare stocks to buy heading into 2025. 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.