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Vitalii Liubimov's Avatar
published in Blogs
Oct 23, 2019

Centene hits upper rail of channel ahead of earnings

 

Healthcare provider Centene (NYSE: CNC) provides programs and services to under-insured and uninsured individuals in the United States. The company is set to release third quarter earnings results on October 22, but the stock ran in to some resistance ahead of the report.

The daily chart shows that the stock has been trending lower over the last five months with a trend channel forming that defines the various cycles within the trend. The stock hit the upper rail of the channel on October 19 and then turned lower on October 21. The chart also shows that the stochastic readings were in overbought territory and made a bearish crossover on the 21st.

If we look at the weekly chart it shows that the downward trend extends all the way back to August 2018. It also shows a longer term trend channel that connects the highs over the past year.

The stock just moved out of oversold territory on the weekly chart, but there is potential resistance just overhead at the 13-week moving average.

In addition to the bearish signal from the daily stochastic crossover, the Tickeron Trend Prediction engine generated a bearish signal for Centene on October 18. The prediction showed a confidence level of 89% and calls for a decline of at least 4% within the next month. Past predictions for the stock have been accurate 77% of the time.

Looking at the fundamentals for the company, Tickeron’s ratings show three separate measures where Centene ranks below average. The Tickeron Price Growth Rating for Centene is 67, indicating slightly worse than average price growth. CNC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron PE Growth Rating for Centene is 79, pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents. A rating of 1 indicates highest PE growth while a rating of 100 indicates lowest PE growth.

The Tickeron Valuation Rating of 81 indicates that the company is slightly overvalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.

Analysts expect Centene to report earnings of $0.95 for the third quarter on revenue of $18.43 billion. In the third quarter of 2018 the company earned $0.89 on revenue of $16.18 billion. This means earnings are expected to grow by 6.7% and revenue is expected to grow by 13.9%. Those growth rates are far below the rates from last quarter and the last three years.

The sentiment toward Centene is mixed ahead of the earnings report. There are 17 analysts following the stock at this time with 15 “buy” ratings and two “hold” ratings. This puts the buy percentage at 88.2% and that is far more bullish than the average stock. On the other hand, the short interest ratio is at 7.1 and that indicates far more bearish sentiment than the average stock.

Related Ticker: CNC

Momentum Indicator for CNC turns negative, indicating new downward trend

CNC saw its Momentum Indicator move below the 0 level on July 18, 2024. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 94 similar instances where the indicator turned negative. In of the 94 cases, the stock moved further down in the following days. The odds of a decline are at .

Price Prediction Chart

Technical Analysis (Indicators)

Bearish Trend Analysis

The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 55 cases where CNC's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .

The 50-day moving average for CNC moved below the 200-day moving average on June 17, 2024. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where CNC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

CNC broke above its upper Bollinger Band on July 16, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Aroon Indicator for CNC entered a downward trend on July 11, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Bullish Trend Analysis

The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where CNC's RSI Indicator exited the oversold zone, of 28 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .

The Moving Average Convergence Divergence (MACD) for CNC just turned positive on July 03, 2024. Looking at past instances where CNC's MACD turned positive, the stock continued to rise in of 45 cases over the following month. The odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where CNC advanced for three days, in of 311 cases, the price rose further within the following month. The odds of a continued upward trend are .

Fundamental Analysis (Ratings)

Fear & Greed

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 69%.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 67, placing this stock slightly better than average.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. CNC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.609) is normal, around the industry mean (3.063). P/E Ratio (15.707) is within average values for comparable stocks, (17.509). CNC's Projected Growth (PEG Ratio) (0.750) is slightly lower than the industry average of (1.089). CNC has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.020). P/S Ratio (0.276) is also within normal values, averaging (0.684).

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating slightly better than average sales and a considerably profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

Notable companies

The most notable companies in this group are Unitedhealth Group (NYSE:UNH), Elevance Health (NYSE:ELV), Cigna Group (The) (NYSE:CI), CVS HEALTH Corp (NYSE:CVS), Humana (NYSE:HUM), Centene Corp (NYSE:CNC).

Industry description

Managed healthcare industry focuses on providing health/medical and disability insurance plans, generally intended to reduce the cost of for-profit health care. The insurance products might be provided through employer-paid (fully or partly) insurance and benefit programs, or through Medicare/Medicaid. Some of the largest providers of managed health care include Aetna, Humana Inc., and Cigna, and UnitedHealthcare.

Market Cap

The average market capitalization across the Managed Health Care Industry is 68.32B. The market cap for tickers in the group ranges from 3.42M to 451.47B. UNH holds the highest valuation in this group at 451.47B. The lowest valued company is HRAA at 3.42M.

High and low price notable news

The average weekly price growth across all stocks in the Managed Health Care Industry was 1%. For the same Industry, the average monthly price growth was 9%, and the average quarterly price growth was 9%. ALHC experienced the highest price growth at 14%, while OSCR experienced the biggest fall at -8%.

Volume

The average weekly volume growth across all stocks in the Managed Health Care Industry was -6%. For the same stocks of the Industry, the average monthly volume growth was 2% and the average quarterly volume growth was -45%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 41
P/E Growth Rating: 70
Price Growth Rating: 50
SMR Rating: 84
Profit Risk Rating: 67
Seasonality Score: -24 (-100 ... +100)
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CNC
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A.I.Advisor
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A.I. Advisor
published General Information

General Information

a multi-line healthcare enterprise

Industry ManagedHealthCare

Profile
Fundamentals
Details
Industry
Managed Health Care
Address
7700 Forsyth Boulevard
Phone
+1 314 725-4477
Employees
67700
Web
https://www.centene.com
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