Trade-Ideas LLC identified

Centene

(

CNC

) as a weak on high relative volume 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 $68.4 million.
  • CNC has traded 274,691 shares today.
  • CNC is trading at 2.15 times the normal volume for the stock at this time of day.
  • CNC is trading at a new low 6.00% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on CNC:

Centene Corporation operates as a diversified, multi-national healthcare enterprise that provides programs and services to under-insured and uninsured individuals in the United States. It operates in two segments, Managed Care and Specialty Services. CNC has a PE ratio of 21. Currently there are 10 analysts that rate Centene a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Centene has been 1.8 million shares per day over the past 30 days. Centene has a market cap of $7.0 billion and is part of the health care sector and health services industry. The stock has a beta of 0.66 and a short float of 10.7% with 10.19 days to cover. Shares are up 14.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Centene as a

buy

. 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, increase in net income and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 33.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • CENTENE CORP has improved earnings per share by 11.9% 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 $2.22 versus $1.43 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $2.22).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 12.6% when compared to the same quarter one year prior, going from $82.62 million to $93.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, CENTENE CORP's return on equity exceeds that of both the industry average and the S&P 500.

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