Can Centene Stock Rebound After A 12% Drop In 10 Days?

Centene (NYSE: CNC), a full-line managed services company which services both government sponsored and private insurance health care programs, has plunged by 12% over the last 10 trading days, and it is down 4% over the last 5 trading days. Earlier this month, Centene announced the acquisition of Magellan for $2.2 billion to expand its behavioral health services. This was positive for Centene and the stock price jumped over 15% following the announcement. However, the stock has corrected since then back to $60 levels, amid volatility in the health insurance stocks. In comparison, the broader S&P 500 grew 1.5% over the last 5 and last 10 trading days. Now, is CNC stock poised to decline further? We don’t think so. We believe that the health insurance stocks, including Centene, will likely see gains in the near term, driven by increased investor expectations from the insurance companies specializing in the government sponsored Medicaid health program. Biden supports the Obamacare plan and investors are hoping for reforms in the overall healthcare sector boding well for CNC stock. There is a 61% chance of a rise in CNC stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last 5 years. See our analysis on Centene Stock Chances of Rise for more details. Curious about the possibility of rising over the next quarter? Check out the CNC Stock AI Dashboard: Chances Of Rise And Fall for a variety of scenarios on how CNC stock could move.

5D: CNC -4.3%, vs. S&P500 1.5%; Underperformed market

(14% likelihood event)

  • Centene stock declined 4.3% over a 5-day trading period ending 1/26/2021, compared to a broader market (S&P500) rise of 1.5%
  • A change of -4.3% or more over 5 trading days is a 14% likelihood event, which has occurred 178 times out of 1256 in the last 5 years

10D: CNC -12%, vs. S&P500 1.5%; Underperformed market

(47% likelihood event)

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  • Centene stock declined 12% over the last 10 trading days (2 weeks), compared to broader market (S&P500) rise of 1.5%
  • A change of -12% or more over 10 trading days is a 47% likelihood event, which has occurred 594 times out of 1240 in the last 5 years

While CNC stock may gain from here, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Pfizer vs Merck.

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