Centene Corporation (CNC) Slid Despite Strong Fundamentals

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Soumya Eswaran

Wed, Apr 2, 2025, 5:53 AM 4 min read

River Road Asset Management, an concern absorption institution released its “River Road Mid Cap Value Fund” Q4 2024 capitalist letter. A transcript of the missive tin beryllium downloaded here. In the 4th quarter, AMG River Road Small Cap Value Fund (Class N) returned 2.97% compared to -1.75% returns for the Russell MidCap Value Index. For the twelvemonth 2024, the money returned 13.56%, compared to Index instrumentality of 13.07%. Stocks rallied successful November aft a Republican triumph but declined sharply pursuing hawkish Fed comments. Shorter duration stocks, including tiny caps and value, mislaid astir of their post-election gains by the extremity of December. For much accusation connected the fund’s champion picks successful 2024, delight cheque its apical 5 holdings.

In its 4th fourth 2024 capitalist letter, River Road Mid Cap Value Fund emphasized stocks specified arsenic Centene Corporation (NYSE:CNC). Centene Corporation (NYSE:CNC) is simply a healthcare endeavor that offers services to under-insured and uninsured families, and commercialized organizations. The one-month instrumentality of Centene Corporation (NYSE:CNC) was 2.46%, and its shares mislaid 17.24% of their worth implicit the past 52 weeks. On April 1, 2025, Centene Corporation (NYSE:CNC) banal closed astatine $60.45 per stock with a marketplace capitalization of $29.987 billion.

River Road Mid Cap Value Fund stated the pursuing regarding Centene Corporation (NYSE:CNC) successful its Q4 2024 capitalist letter:

"The holding with the lowest publication to progressive instrumentality wasCentene Corporation (NYSE:CNC) , a managed attraction enactment (MCO) specializing successful government-sponsored plans. Historically, wellness security has been a dependable concern that generates accordant escaped currency travel (CNC has produced affirmative FCF since 1998), and we judge CNC stands retired arsenic the premier MCO beneficiary of immoderate aboriginal economical weakness. The institution is the starring supplier of Medicaid managed attraction plans with 17% marketplace share, and it besides owns the starring idiosyncratic speech franchise. When the system stumbles, CNC’s revenues should summation arsenic much individuals suffice for CNC’s plans. We are peculiarly encouraged by the caller management’s absorption connected shareholder value–since the laminitis stepped down successful Q4 2021, the institution has divested 7 businesses for much than $3.5B and deployed the proceeds into stock repurchases.

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