Oakmark Funds, advised by Harris Associates, released its “Oakmark Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. The fund returned -1.31% in the third quarter, 15.91% calendar year to date, and 27.84% for the fiscal year. The S&P 500 Total Return Index delivered -3.27%, 13.07%, and 21.62%, respectively, for the same periods. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Oakmark Fund highlighted stocks like Centene Corporation (NYSE:CNC) in the third quarter 2023 investor letter. Headquartered in St. Louis, Missouri, Centene Corporation (NYSE:CNC) is a healthcare enterprise. On October 6, 2023, Centene Corporation (NYSE:CNC) stock closed at $70.21 per share. One-month return of Centene Corporation (NYSE:CNC) was 5.71%, and its shares lost 4.81% of their value over the last 52 weeks. Centene Corporation (NYSE:CNC) has a market capitalization of $38.017 billion.
Oakmark Fund made the following comment about Centene Corporation (NYSE:CNC) in its Q3 2023 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 these benefits from long-term secular tailwinds. In Medicaid, states are steadily outsourcing their programs to managed care companies, like Centene, as it helps states reduce costs and improve care quality. Indeed, Managed Medicaid penetration has increased from 25% of total Medicaid spend in 2010 to 60% today, 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. The stock trades for 10x consensus 2024 EPS, but this doesn’t tell the whole story. Past missteps in Centene’s Medicare business will result in that segment losing $0.80 per share next year. We believe Centene can turn Medicare around and generate positive earnings in the next few years. This could increase EPS by more than $1 per share and reduce the P/E ratio to just 8.5x. We think that’s good value for a business that generates healthy returns on capital and is capable of growing EPS at a low double-digit rate.”
Centene Corporation (NYSE:CNC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 57 hedge fund portfolios held Centene Corporation (NYSE:CNC) at the end of the second quarter, which was 61 in the previous quarter.
We discussed Centene Corporation (NYSE:CNC) in another article and shared the list of worst performing healthcare stocks in 2023. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.
Suggested Articles:
- 14 Best Cancer Stocks To Buy Now
- 10 Best Small-Cap Casino Stocks Hedge Funds Are Buying
- 16 Highest Paying Monthly Dividend Stocks
Disclosure: None. This article is originally published at Insider Monkey.
