Centene Corp: Healthcare Stocks on the Move

Centene Corp (NYSE:CNC) has my attention today and I am excited about the possibilities in the options of this stock. Centene Corp with its market capitalization of $9.29B is a healthcare company. The Company provides programs and services to Government sponsored healthcare programs. It offers member-focused services by assisting in accessing care, coordinating referrals to related health and social services, and addressing member concerns and questions. It also provides education and outreach programs to inform and assist members in accessing healthcare services.

Why Are We Looking at Centene Today?

The shares of Centene displayed impressive bullish momentum in today’s session to establish a new 52-week high. Earlier in today’s session, the stock gained 1.67% to establish a new 52-week high of $79.17. As at 12:46PM EDT, the stock was up 1.35% to $78.79.

Interestingly, the bullish momentum in the shares of Centene has been ongoing over the last couple of years. The stock has gained 582.1% in the last 5 years. It has gained 112.6% from a 52-week low of $35.49 in the last one year. In the year-to-date period, the stock has gained 51.64% and it has gained 15.55% in the last one year.

Interestingly, the shares of Centene have established 12 new highs in the last one month. The stock is also in a consistent uptrend as it trades above its various moving averages. Its 50-day MA of $70.13 is higher than its 100-day MA of $66.26, which is in turn higher than its 200-day MA of $56.1.

Fundamental Factors in Support of the Bullish Thesis

Centene has been delivering impressive growth and EPS surprises in the last 5 years. The stock has outperformed EPS estimates in 18 out of the last 20 quarters. The company has consistently beaten estimates in the last four quarters with an average surprise of 16.88%. Interestingly, analysts expect the company’s EPS to grow by 22.50% this year. EPS growth is expected at 16.90% next year and then at a compound annual rate of 17.45 over the next 5 years.

The company also has an optimistic revenue outlook. Analysts expect its revenue to grow by 35.10% this year. It is expected that the revenue will soar by another 11.50% next year.

Optimistic Analyst Outlook

Analysts are also optimistic about the prospects of Centene. For instance, Zacks gives the stock a number 1 “Strong Buy” rating. In addition, it has Zack’s style scores of “B” on Growth, “B” on Value and “A” on Momentum.

Analysts at Oppenheimer reiterated their “Outperform” rating on Centene and they have an $83 price target on the stock. Analysts at BMO Capital reaffirmed their “Outperform” rating with a $78 price target. Analysts at Cantor Fitzgerald have given the stock a “Buy” rating and they have an $85 price target.

How to Trade CNC Options

I am optimistic about the prospects of Centene and I recommend buying CNC call options. You’ll do well to consider buying the CNC Sep 2015 80.000 call (CNC150918C00080000). The contract looks good at an asking price of $4.50.

— Daily Option Alerts

You May Also Like

About the Author: Daily Option Alerts