December 12, 2024
Top 10 Stock Centene Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Centene – Top 10 Stock in Dow Jones U.S. Health Care Providers Index
Centene is listed as a top 10 stock on December 12, 2024 in the market index D.J. US Health Care because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 84 (top 84% performer), Obermatt assesses an overall strong buy recommendation for Centene on December 12, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Managed |
| Index | Employee Focus US, Diversity USA, D.J. US Health Care, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Centene Strong Buy
| 360 METRICS | December 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 83 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 57 |
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| SENTIMENT | ||||||||
| SENTIMENT | 59 |
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| 360° VIEW | ||||||||
| 360° VIEW | 84 |
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ANALYSIS: With an Obermatt 360° View of 84 (better than 84% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Centene are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Centene. The consolidated Value Rank has an attractive rank of 83, which means that the share price of Centene is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 83% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 57. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 59. But the consolidated Growth Rank has a low rank of 45, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 55 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 84, Centene is better positioned than 84% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 83), secure financing practices (Safety Rank of 57), and positive market sentiment in the professional investor community (Sentiment Rank of 59). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 45), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Centene is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Centene positive
ANALYSIS: With an Obermatt Sentiment Rank of 59 (better than 59% compared with alternatives), overall professional sentiment and engagement for the stock Centene is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Centene. Analyst Opinions are at a rank of 41 (worse than 59% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 40, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 59, which means that professional investors hold more stock in this company than in 59% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 82, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 82% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Centene and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 59 (more positive than 59% compared with investment alternatives), Centene has a reputation among professional investors that is above-average compared with that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Centene Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 83 (better than 83% compared with alternatives) for 2024, Centene shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Centene. Price-to-Sales (P/S) is 91, which means that the stock price compared with what market professionals expect for future sales is lower than for 91% of comparable companies, indicating a good value regarding Centene's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 95% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 81. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than Centene (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 83, is a buy recommendation based on Centene's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Centene Growth Momentum low
| GROWTH METRICS | December 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 39 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 26 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 90 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 25 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 45 |
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ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Centene shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Centene. Only Capital Growth has a good rank of 90, which means that currently professionals expect the company to grow its invested capital more than 26% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 39 which means that currently professionals expect the company to grow less than 61% of its competitors. Profit Growth with a rank of 26 and Stock Returns with a rank of 25 are also low (below 75% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Centene is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Centene Debt Financing Safety above-average
| SAFETY METRICS | December 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 46 |
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| REFINANCING | ||||||||
| REFINANCING | 62 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 42 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 57 |
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ANALYSIS: With an Obermatt Safety Rank of 57 (better than 57% compared with alternatives), the company Centene has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Centene is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Centene and the other two below average. Refinancing is at 62, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 62% of its competitors. But Leverage is high with a rank of 46, meaning the company has an above-average debt-to-equity ratio. It has more debt than 54% of its competitors. Liquidity is also on the riskier side with a rank of 42, meaning the company generates less profit to service its debt than 58% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 57 (better than 57% compared with alternatives), Centene has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Centene are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Centene Top Financial Performance
| COMBINED PERFORMANCE | December 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 83 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 42 |
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| COMBINED | ||||||||
| COMBINED | 81 |
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ANALYSIS: With an Obermatt Combined Rank of 81 (better than 81% compared with investment alternatives), Centene (Health Care Managed, USA) shares have much better financial characteristics than comparable stocks. Shares of Centene are a good value (attractively priced) with a consolidated Value Rank of 83 (better than 83% of alternatives), are safely financed (Safety Rank of 57, which means low debt burdens), but show below-average growth (Growth Rank of 45). ...read more
RECOMMENDATION: A Combined Rank of 81, is a strong buy recommendation based on Centene's financial characteristics. As the company Centene's key financial metrics exhibit good value (Obermatt Value Rank of 83) but low growth (Obermatt Growth Rank of 45) while being safely financed (Obermatt Safety Rank of 57), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 83% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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