How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in Centene (CNC) ten years ago? It may not have been easy to hold on to CNC for all that time, but if you did, how much would your investment be worth today?

Centene's Business In-Depth

With that in mind, let's take a look at Centene's main business drivers.

Centene Corporation is a well-diversified, multi-national healthcare company that primarily provides a set of services to the government sponsored healthcare programs. The company serves the under-insured and uninsured individuals through member-focused services. It is also engaged in providing education and outreach programs to inform and assist members in accessing quality, appropriate healthcare services.

Centene is now a $100-billion plus enterprise catering healthcare services to more than 24 million members across 50 states. The acquisition of WellCare Health leveraged the company’s position as the largest Medicaid managed care organization in the country. The combined entity now has 22 million members. The company retained its market-leading position nationwide, serving 26.6 million members at the year-end of 2021.

Through a diversified product portfolio and expanding geographic reach, Centene continues to deliver results by executing on our strategy, growing premium and service revenues profitably. This is evidenced by organic growth within its existing states, new Medicaid contracts, new contract awards in innovative healthcare services, key acquisitions to enhance its medical management platform and participation in Health Insurance Marketplaces. Centene acquired Health Net on Mar 24, 2016 which became its wholly owned subsidiary.

Centene offers affordable and high-quality products to nearly 1 in 15 individuals across the nation.

Founded as a single health plan in Wisconsin in 1984, Centene has established itself as a national leader in healthcare services. The company operates in two segments: Managed Care and Specialty Services.

Managed Care (95% of total revenues in 2021): This segment provides health plan coverage to individuals through Government subsidized programs, including Medicaid. The Managed Care segment also includes the operations previously included in Health Net's Western Region Operations Segment.

Specialty Services (5%): This segment consists of its specialty companies offering diversified healthcare services and products to state programs, correctional facilities, healthcare organizations, employer groups and other commercial organizations.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Centene ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in August 2012 would be worth $9,270.07, or an 827.01% gain, as of August 22, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.

In comparison, the S&P 500 gained 198.17% and the price of gold went up 2.45% over the same time frame.

Analysts are anticipating more upside for CNC.

Centene’s second-quarter earnings beat estimates. Its shares have outperformed its industry year to date. Its top line has witnessed consistent growth since 2002. It boasts an impressive inorganic growth strategy for expanding its markets and increasing Medicaid membership. Its medical membership has been on an uptick, courtesy of contract wins and expansion across different regions. A solid 2022 outlook instills investors’ confidence in the stock. Adjusted EPS is anticipated within $5.60-$5.75, indicating a jump from $5.15 in 2021. CNC intends to reduce its real-estate footprint to improve efficiency. However, operating costs have been weighing on its margins. Its high debt reflects inadequate financial flexibility. Weak results by the Health Insurance marketplace remain a concern. As such, the stock warrants a cautious stance.

Over the past four weeks, shares have rallied 6.55%, and there have been 8 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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