CNC
Centene Corp
Healthcare, Event Driven/Special Sit
02/08/2016
Presented
| Date | 02/03/2016 |
| Price | $29.97 |
| Market Cap | $7.38B |
| Ent Value | $8.12B |
| P/E Ratio | 20.89x |
| Book Value | $9.00 |
| Div Yield | 0% |
| Shares O/S | 246.26M |
| Ave Daily Vol | 3,671,886 |
| Short Int | 12.74% |
Current
| Price | $68.48 |
| Market Cap | $36.02B |
| Centene Corp. is a diversified, multi-line healthcare company that provides programs and services to government-sponsored healthcare programs, focusing on under-insured and uninsured individuals. It operates its business through two segments: Medicaid Managed Care and Specialty Services. The Medicaid Managed Care segment provides medicaid and medicaid related health plan coverage to individuals through government subsidized programs, including the state children's health insurance program, long-term care, foster care, and the supplemental security income program. The Specialty Services segment offers products for behavioral health, care management software, health insurance exchanges, individual health insurance, life and health management, long-term care programs, managed vision, telehealth services, and pharmacy benefits management to state programs, healthcare organizations, employer groups and other commercial organizations, as well as to its own subsidiaries. The company also provides education and outreach programs to inform and assist members in accessing healthcare services. Centene was founded in 1984 and is headquartered in St. Louis, MO. |
Please note, this stock split on 02/07/2019 at a ratio of 2/1. The presented data has been updated to account for the change, however, the text of the note may refer to data based on the original presented price of $59.94.
Publicly traded companies mentioned herein: Aetna Inc (AET), Anthem Inc (ANTM), Centene Corp (CNC), Humana Inc (HUM), Health Net Inc (HNT)
Highlights
The bears on the Street seem to think that Centene (CNC) is likely to experience slower growth over the foreseeable future; however, the presenter disagrees with this perspective and is long the stock at present levels (~$60). In his opinion, the acquisition of Health Net provides a near term catalyst (the deal closing) and there is a reasonably clear path to $5/share of annual earnings. Plus, there is a “free call option” on further Medicaid expansion that investors “will just have to wait for due to how politics generally play out.” In the interim, the stock is attractively and cheaply valued at below 12x future pro forma earnings.
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