Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Centene as such a stock due to the following factors:
- CNC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $52.7 million.
- CNC has traded 190,998 shares today.
- CNC traded in a range 202.2% of the normal price range with a price range of $4.53.
- CNC traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on CNC:
Centene Corporation provides multi-line healthcare programs and services in the United States. It operates in two segments, Managed Care and Specialty Services. CNC has a PE ratio of 26.5. Currently there are 8 analysts that rate Centene a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for Centene has been 819,600 shares per day over the past 30 days. Centene has a market cap of $4.8 billion and is part of the health care sector and health services industry. The stock has a beta of 0.89 and a short float of 7.7% with 6.78 days to cover. Shares are up 38.9% year-to-date as of the close of trading on Monday.
rates Centene as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, growth in earnings per share, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- CNC's very impressive revenue growth greatly exceeded the industry average of 19.5%. Since the same quarter one year prior, revenues leaped by 54.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 30.89% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- CENTENE CORP has improved earnings per share by 11.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CENTENE CORP increased its bottom line by earning $2.85 versus $0.01 in the prior year. This year, the market expects an improvement in earnings ($3.80 versus $2.85).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Health Care Providers & Services industry average. The net income increased by 23.8% when compared to the same quarter one year prior, going from $39.48 million to $48.86 million.
- Net operating cash flow has significantly increased by 320.18% to $159.44 million when compared to the same quarter last year. In addition, CENTENE CORP has also vastly surpassed the industry average cash flow growth rate of 5.46%.
- You can view the full Centene Ratings Report.