Centene Corporation (CNC, Financial) (“Centene” or “Company”) is a St. Louis, MO - based Medicaid managed care company. The Company, for the most part, services government-sponsored healthcare programs. It is the largest Medicaid managed care organization in the US7 and will get even bigger after its acquisition of Wellcare Group (expected to close in 2020). Centene has been very successful in winning contracts and growing revenues. Their success is due to their large investments in systems, strong balance sheet, and prudent capital allocation. Long-term FPA Capital shareholders might recall that we have invested in this space before and it is the second time we are investing in Centene.
In their latest earnings release (on 10/22/19 for the third quarter ended September 30, 2019), the Company reported a 17% year-over-year revenue increase, a 6% increase in membership, and a $500mm buyback authorization.
From FPA Capital Fund (Trades, Portfolio)'s fourth-quarter 2019 commentary.
