By analyzing existing basic indicators between Centene Corp and Cigna, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Cigna with a short position in Centene Corp. Check out our
pair correlation module for more information.
Let's begin by analyzing the assets.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Centene Corp has an asset utilization ratio of 1419.54 percent. This suggests that the company is making $14.2 for each dollar of assets. An increasing asset utilization means that Centene Corp is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as Centene or Humana is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.
How important is Centene Corp's Liquidity
Centene Corp
financial leverage refers to using borrowed capital as a funding source to finance Centene Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Centene Corp financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Centene Corp's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Centene Corp's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Centene Corp's total debt and its cash.
Correlation Between Centene and Humana Inc
In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Centene Corp together with similar or unrelated positions with a negative correlation. For example, you can also add Humana to your portfolio. If Humana is not perfectly correlated to Centene Corp it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Centene Corp, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both Centene Corp and Humana in your portfolio? Please note if you are using this as a pair-trade strategy between Centene Corp and Humana, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check
pair correlation details between CNC and HUM for more information.
Breaking it down a bit more
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Let me now analyze Centene Corp revenue. Based on the latest financial disclosure, Centene Corp reported 104.18
B of revenue. This is much higher than that of the Healthcare sector and significantly higher than that of the
Healthcare Plans industry. The revenue for all United States stocks is significantly lower than that of the stock. As for Cigna Corp we see revenue of 160.55
B, which is much higher than that of the Healthcare Plans
| Centene | 104.18 Billion |
| Sector | 0.0 |
| Cigna | 160.55 Billion |
Will Centene pull back in May 2021?
Downside variance is down to 1.8. It may suggest a possible volatility slip.
As of the 27th of April, Centene Corp shows the Mean Deviation of 1.1,
downside deviation of 1.34, and Risk Adjusted Performance of 0.0558. Centene Corp
technical analysis gives you the methodology to make use of
historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of
historical prices and volume momentum, or the prices will eventually revert. We were able to interpolate nineteen
technical drivers for Centene Corp, which can be compared to its rivals. Please confirm
Centene Corp maximum drawdown, and the
relationship between the
information ratio and
downside variance to decide if Centene Corp is priced correctly, providing market reflects its regular price of 66.0 per share. Given that Centene Corp has
jensen alpha of
(0.008439), we suggest you to validate Centene Corp's prevailing market performance to make sure the company can sustain itself at a future point.
The Bottom Line
Whereas some other entities within the healthcare plans industry are still a little expensive, even after the recent corrections, Centene Corp may offer a potential longer-term growth to investors. The bottom line, as of the 27th of April 2021, our up-to-date 30 days buy-hold-sell advice on the company is
Strong Buy. We believe Centene Corp is currently
undervalued with
very small chance of bankruptcy for the next two years.
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Centene Corp. Please refer to our
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