Why Centene Is a Hot Deal Right Now
Hey, investors! If you’re hunting for a stock that’s both cheap and growing fast, come on. Think of Centene – it’s currently hovering around $73, with analysts saying it could jump to $150 in the next couple of years. That’s a 100%+ upside and it’s not a dream—you’re looking at real numbers.
Price-to-Earnings: The Low‑Pain, High‑Gain Sweet Spot
- Current P/E sits at 14.8, a shade of the cheapest in the last five years.
- We’ve seen P/E’s that high as 71.7 back in 2022 – a wild ride.
- For the past half-decade, buying when P/E is around 15 has been a solid play.
- The forward P/E is a modest 9.6, like a pocket‑sized ballista shot.
Growth That Keeps Things Rolling
If you’re one of the few that thinks “cheap and slow” is the ticket, think again. Analysts forecast 11.7% annual EPS growth over the next five years – higher than the typical 9.3% for S&P 500 firms.
What an analyst from Trading.biz remarked: “A good deal on a company that’s not growing is so much less exciting. If earnings are falling, even a bargain price is a losing bet.”
In practical terms:
- Centene’s earnings are up – it’s not just hanging on.
- Being undervalued and growing = a double‑whammy for the price.
- With this combo, the stock could “easily hit $150” in the next few years.
Key Numbers that Back the Sweet Spot
- Share buybacks: 4.1% yield
- Over the last five years sales grew at 18.7% per year.
- Earnings rose at 14.3% per year.
- Projected 2025 earnings-per-share: $7.60.
- At a conservative P/E of 20, that gives a target price of $152 – more than double the current price.
Since September 2023, the stock’s been riding a steady climb. Buying at roughly $73 puts you near the bottom of a rising channel. Sure, the price can swing lower – but the fundamentals make a good “buy low, hold long” story.
Putting the Plan Together
We’re not saying this is a sure‑fire win. If earnings or forecasts slip, the upside shrinks. If they stay solid or even improve, your target moves higher. That’s the nature of investing: bet on the fundamentals, but set a risk limit and decide when you’ll take that profit or cut the loss.
Bottom line – Centene is a value play with growth. It’s neither a quick gravy train nor a slow cooker; it’s a middle‑ground that might bring you a solid 100% return if you play it right.
