Corporate Webpages Centene Corporation
The healthcare maintenance industry was beaten down recently by
fear of government intervention turning it into a "utility-like"
industry, highly regulated. As these fears abate, many think
healthcare issues are underpriced. Centene is a large
healthcare maintenance organization based in St. Louis with
operations in and around Missouri. Centene went public in 2002.
IPO proceeds were used for substantial acquisitions, making this
a growth company. In 2006, the company was hit by class action
lawsuits. A loss of potential business in Kansas and other
setbacks caused the lawyers to decide transparency was lacking.
But lately, all the big news surrounding Centene seems to be
concerned with real estate.
Real estate? Regarding a healthcare maintenance organization?
Sometimes mayors and even governors will do anything to attract
large development to blighted areas. One of the prime examples
of the past of which we can think is when Governor James Rhodes
of Ohio booted the Public Utilities Commission out of their
offices in order to provide temporary office space for the giant
American Electric Power while it moved its headquarters from
Manhattan to Columbus. Over objections of local property
owners, Centene wanted to obtain by eminent domain land in
Clayton, a suburb of St. Louis to build its new high rise
headquarters. After encountering opposition, Centene shifted
its focus to downtown St. Louis to an area known as "Ballpark Village."
Here, also opposition was encountered. One of our traders once
sought a job in downtown St. Louis and asked a parking lot
attendant where, if he took the job, he should relocate. In
what part of town. "Don't go north, said the attendant, the
area has had riots and is burned out. Don't go south either,
and definitely don't go east." The only direction left seemed
to be west toward the airport. Downtown St. Louis has been
severely hit by the economy and desperately needs the jobs and
development that Centene could offer. To attract this sort of
business, government officials will try to make all sorts of
concessions, tax breaks, etc. The suburb of Clayton was to the west.
Clayton stepped up its efforts to win Centene back by applying
eminent domain, where Missouri laws require an area to be
defined as "blighted" in order to apply the law. But parties
opposed there continued to apply a lawsuit to stop development.
Centene decided to move ahead on development despite the lawsuit.
Eventually a ruling came down that Clayton "was not blighted,"
and Centene began to lose a lot of money, time, and
functionality for its new headquarters site, while other states
started trying to woo Centiene away from Missouri.
Ballpark Village in downtown St. Louis eventually won out with
offers of $78 million in tax breaks and $250 million in
supplemental development funds from state and federal programs
designed to increase jobs. There was a rush from firms at the
other end of the state in Kansas City to acquire office space
leases in Centene's new complex.
Then in yet another turn, focus shifted back to Clayton, as
Centene decided it was not coming to Ballpark Village after all.
Eminent domain laws in Missouri are tricky and provide
a lot of jobs for attornies but few others.
All this back-and-forth was costing Centene a lot of money and
Centene took a substantial charge for costs involved against
earnings, causing us to give it a negative "GAAP" rating. The
healthcare end of the business wasn't going that well, either.
The Centene Tower began to rise in Clayton in a much scaled-down
version from what was earlier projected. Government tax
incentives were much less than what was earlier described here.
Centene seemed more or less forced to make an additional public
offering diluting share value in order to raise capital.
02-03-2010: Centene Corporation (CNC): Health Insurer or Real Estate Developer?
(WAIT FOR PAGE TO LOAD COMPLETELY BEFORE LINKS WORK.)
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Centene Corp. (CNC ) Sector: Healthcare
7711 Carondelet Avenue Industry: Health Care Plans
Suite 800 Exchange: NYSE
St. Louis, Missouri.
Centene Corporation operates as a multiline healthcare company in
the United States. It operates 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
medicaid, the state children-Ęs health insurance program, foster
care, and medicare special needs plans, as well as aged, blind, or
disabled (ABD) program. Its health plans principally provide primary
and specialty physician care, inpatient and outpatient hospital
care, transportation assistance, emergency and urgent care, vision
care, prenatal care, dental care, laboratory and x-ray services,
home health and durable medical equipment, immunizations,
prescriptions and over-the-counter drugs, home health and durable
medical equipment, and behavioral health and substance abuse
services. The Specialty Services segment manages behavioral
healthcare for members via a contracted network of providers;
provides health insurance to individual customers and their
families; implements life and health management programs; offers
long-term care services to the elderly and people with disabilities;
manages vision benefits for members; and administers pharmacy
benefits and processes pharmacy claims. Centene offers its services
through primary and specialty care physicians, hospitals, and
ancillary providers. The company was founded in 1984 and is
headquartered in St. Louis, Missouri.
Last Trade: 19.28 52-Week Range: 22.50 - 15.00
Trade Date: 02-02 Avg. Volume: 533,866 Shares
Index Membership: S&P 600 SmallCap Employees: 3,600
Corporate Governance:
Centene Corp.'s Corporate Governance Quotient (CGQ-«) as of 1-Feb-10
is better than 56.2% of S&P 600 companies and 78.7% of Health Care
Equipment & Services companies.
EPS: 1.84 Dividend Amount: $ 0.00 Yield: 0.00%
Ex-Dividend Date: N/A Mkt Cap: $ 875,370K
Payout Ratio: 0.00%
Last Split Factor (new for old): 2:1 Split Date: 20-Dec-04
Key Statistics:
Enterprise Value: $ 717,880K Revenue (ttm) : $ 3,930,000K
Gross Profit: $ 667,260K
Earnings before Income Tax, Depreciation and Amortization: $ 193,810K
Enterprise Value/Revenue (ttm): 0.18 Revenue per Share: $ 91.40
Enterprise Value/EBITDA (ttm): 3.70 Qtrly Rev Growth (y to y): 21.00%
P/E Ratio (fwd projected): 10.37 P/E Ratio (current): 10.47
P/E Growth Ratio (5 yr expected): 0.77 Operating Margin: 3.91%
Price/Sales Ratio: 0.22 Profit Margin: 2.07%
Price/Book Value: 1.44 Book Value: $ 13.35/sh.
Return on Assets: 6.42% Net Income Avl to Common: $ 85,620K
Return on Equity: 16.28% Diluted Earnings/Share: $ 1.84
Qrtly Earnings Growth (yoy): 16.50%
Balance Sheet Items : Cash Flow Items (ttm):
(most recent qrtr) (trailing 12 mo.)
Total Cash: $ 434,830K Operating Cash Flow:$ 272,440K
Total Debt: $ 277,330K Lvgd Free Cash Flow:$ 315,360K
Total Debt/Equity: 0.00
Total Cash/Share: $ 9.58
Current Ratio: 0.87
Share Statistics: Stock Price History:
Shares Outstanding: 45,400K Stk 52-Week Change: 5.88%
Float: 42,790K S&P 500 52-Wk Chng: 31.95%
Sh. Short % of Float: 3.40% 50-Day Moving Avg: 20.84
Short Ratio: 3.60 200-Day Moving Avg: 19.06
% Held by Institutions: 101.20% Beta: 0.88
% Held by Insiders: 1.85%
Analysts' Estimates: Cur. Qtr Next Qtr Cur. Year Next Year
___________________________ Dec-09 Mar-10 Dec-09 Dec-10
Average Earnings Estimate 0.52 0.39 1.92 1.86
Average Revenue Estimate 1,100M 1,100M 4,110M 4,540M
Factors Comparing This Company to Its Industry Leader (1.0 = Average):
Long Term EPS Growth Rate (5 yr): 0.000 EPS Growth (Qrtly YoY): 0.185
PEG Ratio (ttm, 5 yr expected): 0.412 P/E Ratio (ttm): 0.131
Revenue Growth (Qrtly YoY): 0.840
Annual Income Statements: All numbers in thousands)
Period Ending 31-Dec-08 31-Dec-07 31-Dec-06
Total Revenue 3,364,515 2,919,292 2,279,020
Cost of Revenue 2,697,255 2,465,512 1,880,546
Gross Profit 667,260 453,780 398,474
Operating Expenses:
Research & Development 0 0 0
Selling, General & Administrative 535,699 399,687 346,284
Non-Recurring Expenses 0 0 81,098
Other Operating Expenses 0 0 0
Total Operating Expenses 0 0 0
Operating Income or Loss 131,561 54,093 -28,908
Income from Continuing Operations:
Total Other Income/Expenses Net 21,728 25,169 17,892
Earnings Before Interest & Taxes 153,289 79,262 -11,016
Interest Expense 16,673 15,626 10,636
Income Before Taxes 136,616 63,636 -21,652
Income Tax Expense 52,435 22,367 21,977
Minority Interest 0 0 0
Net Income from Continuing Op.s 84,181 41,269 -43,629
Non-recurring Events:
Discontinued Operations -684 32,133 0
Extraordinary Items 0 0 0
Effect of Accounting Changes 0 0 0
Other Items 0 0 0
Net Income 83,497 73,402 -43,629
Preferred Stock & Other Adjustmnts 0 0 0
Net Income Avail To Common Shares 83,497 73,402 -43,629
Quarterly Income Statements: All numbers in thousands)
Period Ending 30-Sep-09 30-Jun-09 31-Mar-09 31-Dec-08
Total Revenue 1,038,234 1,039,469 932,435 790,672
Cost of Revenue 1,002,690 770,265 755,302 555,969
Gross Profit 35,544 269,204 177,133 234,703
Operating Expenses:
Research & Development 0 0 0 0
Selling, General & Adminis. -2,466 237,769 146,221 200,590
Non-Recurring Expenses 0 0 0 0
Other Operating Expenses 0 0 0 0
Total Operating Expenses 0 0 0 0
Operating Income or Loss 38,010 31,435 30,912 34,113
Income from Continuing Operations:
Total Other Income/Expenses Net 3,750 4,418 3,613 6,194
Earnings Before Int. & Taxes 41,760 35,853 34,525 40,307
Interest Expense 4,064 4,160 3,986 4,237
Income Before Taxes 37,696 31,693 30,539 36,070
Income Tax Expense 12,426 11,789 10,845 13,726
Minority Interest -2,518 0 0 0
Net Income from Continuing Op.s 22,752 19,904 19,694 22,344
Non-recurring Events:
Discontinued Operations -1,460 -485 -449 -921
Extraordinary Items 0 0 0 0
Effect of Accounting Changes 0 0 0 0
Other Items 0 0 0 0
Net Income 21,292 19,419 19,245 21,423
Preferred Stock & Other Adj.s -24 811 -787 0
Net Income Avail To Common Shs 21,268 20,230 18,458 21,423
Annual Balance Sheets: All Numbers in Thousands
Period Ending 31-Dec-08 31-Dec-07 31-Dec-06
Current Assets:
Cash & Cash Equivalents 379,099 268,584 271,047
Short Term Investments 109,393 46,269 66,921
Net Receivables 92,531 90,072 91,664
Inventory 0 0 0
Other Current Assets 85,320 41,414 22,189
Total Current Assets 666,343 446,339 451,821
Long-Term Investments 332,411 317,041 145,417
Property, Plant & Equipt 175,858 138,139 110,688
Goodwill 163,380 141,030 135,877
Intangible Assets 17,575 13,205 16,202
Accumulated Amortization 0 0 0
Other Assets 95,585 63,368 34,975
Deferred Long Term Asset Charges 0 0 0
Total Assets 1,451,152 1,119,122 894,980
Current Liabilities:
Accounts Payable 219,566 105,096 72,723
Short/Current Long Term Debt 255 971 971
Other Current Liabilities 421,157 380,733 314,257
Total Current Liabilities 640,978 486,800 387,951
Long Term Debt 264,637 206,406 174,646
Other Liabilities 44,265 10,869 5,960
Deferred LT Liability Charges 0 0 0
Minority Interest 0 0 0
Negative Goodwill 0 0 0
Total Liabilities 949,880 704,075 568,557
Stockholder Equity:
Misc. Stocks Options Warrants 0 0 0
Redeemable Perferred Stock 0 0 0
Preferred Stock 0 0 0
Common Stock 43 44 44
Retained Earnings 275,236 193,310 117,039
Treasury Stock 0 0 0
Capital Surplus 222,841 221,693 209,340
Other Stockholder Equity 3,152 0 0
Total Stockholder Equity 501,272 415,047 326,423
Net Tangible Assets 320,317 260,812 174,344
Quarterly Balance Sheets: All Numbers in Thousands
Period Ending 30-Sep-09 30-Jun-09 31-Mar-09 31-Dec-08
Current Assets:
Cash & Cash Equivalents 393,982 384,499 342,229 379,099
Short Term Investments 45,692 61,217 75,400 109,393
Net Receivables 104,798 157,863 147,899 92,531
Inventory 0 0 0 0
Other Current Assets 69,586 82,185 71,723 85,320
Total Current Assets 614,058 685,764 637,251 666,343
Long-Term Investments 486,889 394,395 422,873 332,411
Property, Plant & Equipt 209,920 194,277 176,719 175,858
Goodwill 219,100 218,121 218,216 163,380
Intangible Assets 23,454 22,714 23,603 17,575
Accumulated Amortization 0 0 0 0
Other Assets 81,593 70,938 74,168 95,585
Deferred LT Asset Charges 502,867 481,596 466,723 421,157
Total Assets 1,635,014 1,586,209 1,552,830 1,451,152
Current Liabilities:
Accounts Payable 204,411 181,605 194,132 219,566
Current Portion LT Debt 645 243 20,608 255
Other Current Liabilities 0 0 0 0
Total Current Liabilities 707,923 663,444 681,463 640,978
Long Term Debt 276,687 288,513 269,711 264,637
Other Liabilities 57,147 49,235 52,134 44,265
Deferred LT Liab. Charges 0 0 0 0
Minority Interest 18,996 39,343 0 0
Negative Goodwill 0 0 0 0
Total Liabilities 1,060,753 1,040,535 1,003,308 949,880
Stockholder Equity:
Misc. Options, WarrantS 0 0 0 0
Redeemable Perferred Stock 0 0 0 0
Preferred Stock 0 0 0 0
Common Stock 45 45 43 43
Retained Earnings 335,192 313,924 293,694 275,236
Treasury Stock -46,497 -46,405 0 0
Capital Surplus 277,709 273,029 227,327 222,841
Other Stockholder Equity 7,812 5,081 28,458 3,152
Total Stockholder Equity 574,261 545,674 549,522 501,272
Net Tangible Assets 331,707 304,839 307,703 320,317
Annual Cash Flow: All Numbers in Thousands
Period Ending 31-Dec-08 31-Dec-07 31-Dec-06
Net Income 83,497 19,419 -43,629
Operating Activites:
Depreciation 35,414 27,807 20,600
Adjustments to Net Income 24,148 5,293 96,480
Changes in Accounts Recv'bls -1,548 1,663 -39,765
Changes in Liabilities 85,002 97,606 156,174
Changes in Inventories 0 0 0
Changes in Other Op'ing Actv's -4,535 -3,531 5,172
Total Cash Flow fr Operations 221,978 202,240 195,032
Investing Activities:
Capital Expenditures -65,156 -53,937 -50,318
Investments -3,388 -149,628 -33,167
Other Cash Flows fr Investing -85,377 -21,899 -66,772
Total Cash Flows fr Investing -153,921 -225,464 -150,257
Financing Acitivies:
Dividends Paid 0 0 0
Sale or Purchase of Stock -18,156 -4,077 -880
Net Borrowings 57,514 24,838 77,004
Other Cash Flows fr Financing 3,100 0 2,790
Total Cash Flows fr Financing 42,458 20,761 78,914
Effect of Exchange Rate Change 0 0 0
Change in Cash & Cash Equiv.s 110,515 -2,463 123,689
Quarterly Cash Flow: All Numbers in Thousands
Period Ending 30-Sep-09 30-Jun-09 31-Mar-09 31-Dec-08
Net Income 21,292 19,419 19,245 21,423
Operating Activites:
Depreciation 9,908 10,659 10,233 9,396
Adjustments to Net Income 6,632 2,341 7,232 -6,338
Changes in Accounts Recv'bls 22,946 16,069 -39,396 49,249
Changes in Liabilities 56,836 -16,153 27,998 20,101
Changes in Inventories 0 0 0 0
Changes in Other Oper'g Acts -5,274 6,366 -1,894 1,633
Total Cash Flow f Operations 114,858 38,701 23,418 95,464
Investing Activities:
Capital Expenditures -12,863 -18,676 -11,157 -12,568
Investments -62,714 30,920 -68,652 12,466
Other Cash Flows fr Investing -23,912 -2,430 -5,191 -1,868
Total Cash Flows fr Investing -99,489 9,814 -85,000 -1,970
Financing Acitivies:
Dividends Paid -1,422 -568 -1,181 0
Sale or Purchase of Stock 6,969 -3,779 483 -4,682
Net Borrowings -11,461 -1,930 25,427 14,919
Other Cash Flows fr Financing 28 32 -17 84
Total Cash Flows fr Financing -5,886 -6,245 24,712 10,321
Effect of Exchange Rate Chg 0 0 0 0
Change in Cash & Cash Equiv. 9,483 42,270 103,815 0
CNC Centene Corp. [Indices near +3.0 or near zero,
or < zero bear special attention.]
P/E Ratio Tests:
Current P/E Ratio < 28? 2.6743 P/E Ratio > 5? 1.0000
P/E Ratio Vs Growth Rate: 0.3100 Forward P/E Ratio < 28? 2.7001
Sales Tests:
Price/Sales Ratio < 2.3? 3.0000 Inventory/Sales < 5%? 1.0000
Sales < $1 billion? 0.2972 Operating Margin < 7.5%? 1.9182
Balance Sheet Tests:
Debt/Equity < 0.40? 1.0000 Long-Term Debt Service: 1.8942
LTD Being Reduced? 0.6000 Short-Term Debt Service: 3.0000
Current Ratio > 2? 0.4335 Working Capital >= 1.5? 2.3057
Leverage Ratio < 20%? 1.0364 Debt / Assets < 1? 3.0000
Quick Ratio > 1? 0.7046 Inventory Turnover > 1? 1.0000
Shares Out Decreasing? 1.8000 Market Cap.> 1.5 Billion? 1.7136
Profit Margin > 7.5%? 0.2760
Income Tests:
Dividend Yield > 2.0%? 0.0000 EPS Annual Growth > 10%? 0.0000
Enterprise Value/Revenue: 0.1200 EPS 5-yr Growth > 20%? 0.0000
Enterprise Value/EBITDA: 0.5291 EPS Growth Consistent? 2.4000
EPS Qrtly Growth > 10%? 1.6500 Collection < 45 days? 3.0000
Rev. Qtrly Growth > 15%? 3.0000 Gross Pft/Cur. LTD < 1? 3.0000
EPS Annual Growth > 10%? 0.0000 Borrowing Int. Rate< 6%? 1.5663
Stock Performance Tests:
Volatility > 25%? 1.6000 % Held by Insiders < 5%? 2.7027
Beta > 1.25? 0.7040 % Held by Institut. < 50? 0.4941
50 Da MA > 200 Da MA? 0.2770 % Held by Institut. > 30? 3.0000
52-Wk Change vs. S&P 500: 2.1301 Short Ratio > 5? 0.7200
Price/Book Value < 3? 2.5600 Short % of Float > 20? 0.1700
Return on Assets > 17%? 0.3776 Average Volume > 100,000? 3.0000
Cash Flow Tests:
Oper. C.F. > Lever'd C.F: 0.8639 Positive Free Cash Flow? 1.0000
Positive Oper. Cash Flow? 1.0000 Price to C.F./sh. Ratio: 0.1983
Cash Flow / Assets >.10? 1.9288
CNC Centene Corp. Overall Zenith Index: 1.4265
Financial Statements |
Financial Ratios |
. . . . . . . . . . . . 1 = Highest , 10 = Lowest
Market Grader |
Intrinsic Value |
Intrinsic Value by Discounted Cash Flow Method:
Intrinsic Value |
Intrinsic Value by Projected Earnings Growth Method:
Stock Scout |
We find "Scout" to be a bit biased toward the high end, so anything under a 6 is considered a negative, 6 and above, positive.
Projected Earnings |
Research Reports |
Analysts' Opinions |
Insider Activity |
Institutional Activity |
Institutional Orders to Buy or Sell:
Sentiment |
Zenith uses the "sentiment" score above or below 50 to award a positive or negative point in the Decision Matrix.
Short Interest Ratio |
As the short interest rises as a percentage of average daily share volume (Days to Cover), this is considered a measure of negative sentiment. Similarly, a decrease in that percentage is considered positive sentiment.
Stock Report |
Management's Discussion of Results of Operations Excerpts |
Moving Average Chart |
Right Time Study |
Channeling Potential |
The summary below includes a value for `Degree,' which refers on a
scale of 1 to 10 the range of a channel in the period under consi-
deration compared to the total range of price movement. It also looks
for the last closing price to be within the channel, otherwise zeroed.
The `Index' is the `Degree' weighted for volatility. Generally, the
the higher the index, the more suitable is the stock for trading as
a `rolling stock' between channel high and low points.
Results for cnc:
Symbol? CNC
Total Months Available: 75
Months in Cycle? 4
Months Covered by Periods: 12
Period 1 Period 2 Period 3
H1 L1 H2 L2 H3 L3
22.50 15.00 20.89 16.89 22.22 17.25
RANGE = 22.50 TO 15.00 Close = 19.28
CHANNEL = 20.89 TO 17.25 Degree = 5
Volatility = 18.88% Index = 9
Intraday Chart |
20 Days:
Stock Fetcher |
Point & Figure Chart |
Wall Street Analyzer |
Marketspace Chart |
Time Series Forecast |
Neural Network Prediction |
"Neurostock" can only track long trades. Therefore its performance, as tracked by itself on stocks which are consistently falling, may not appear as good as it could if each "sell" signal were a "short sale."
Ultimate Trading Systems |
The corresponding trades for the above chart are shown in tabular form below.
Recommendation |
| Factors | Weighted Points |
|---|---|
| News | + 1 |
| Comparison | + 1 |
| Industry | - 1 |
| Bond Issue | + 1 |
| Zenith Index | + 1 |
| GAAP vs. non-GAAP Earnings < 1% | - 1 |
| Cash Flow | + 1 |
| Ratios | + 1 |
| Market Grader | + 1 |
| Intrinsic Value DCF | + 1 |
| Intrinsic Value DDM | + 1 |
| Stock Scout | + 1 |
| Projected Earnings | - 1 |
| Research Reports | - 1 |
| Analysts | - 1 |
| Executive Perquisites | - 1 |
| Insider Activity | - 1 |
| Institutional Activity | - 1 |
| Management Reporting | + 1 |
| Short Interest | + 1 |
| Sentiment | - 1 |
| Standard & Poor's | + 1 |
| Moving Average | - 1 |
| Right Time Study | - 1 |
| Stock Fetcher | + 1 |
| Point & Figure | + 1 |
| Wall Street Analyzer | - 1 |
| Marketspace Chart | - 1 |
| Time Series Chart | + 1 |
| Neural Network | - 1 |
| Stock Options | + 1 |
| Ultimate Trading Systems | + 1 |
| Total | + 4 |
Place 1,550 shares of Centene Corporation (CNC) on the Active List.
