Daily Stock Pick: August 3rd, 2022

Stocks edged higher this morning, taking back some of the losses of the past two days, despite growing concerns about weakening customer demand and the highest year-over-year reading for the PCE Price Index (6.8%) since 1982.  

According to Bloomberg, of the 281 S&P 500 companies that have reported second-quarter earnings so far, roughly 60% have topped revenue forecasts, and approximately 74% have beat profit projections. Compared to last year, revenue growth is up 13.8%, and earnings are up 6%. Still, many investors struggle to trust recent gains as recession concerns continue loom on Wall Street.

Companies that operate in industries like health care, utilities, and consumer staples are known to hold up well during economic downturns because their offerings are needed in all phases of the business cycle. Today we’re highlighting a leader from a defensive sector that’s currently gaining steam in a market rocked by recession fears.   



Multi-national healthcare and managed care provider Centene Corporation (CNC) has been a beneficiary of the latest uptick in healthcare and seems ready to build on that strength amid a market being rocked by fears of recession. 

Over the past four quarters, earnings increased an average of 21%, and revenue increased by an average of 15%. Centene beat first-quarter predictions, with revenue rising 24% year over year. Analysts predict that CNC earnings per share will increase by 8% in 2022. Profits are seen ramping up, with 9% growth seen this year and growth of 13% expected in 2023.

Centene recently increased its 2022 full-year guidance, citing increased Medicaid premium revenue and “favorable” performance so far in the second quarter. For 2022, the company increased its Premium and Service Revenues guidance range by $2.0 billion to a new range of $134.3 billion to $136.3 billion and has increased its Adjusted Diluted EPS guidance range by $0.15 to a new range of $5.55 to $5.70.

As the leader in managed care, Centene provides high-quality, affordable products to nearly 1 in 15 Individuals across the nation, mainly through government-sponsored healthcare programs. The $100-billion plus enterprise ranked No. 24 on the 2021 Fortune 500. The pros covering CNC give it a solid Buy rating and a median price target of $104.50, representing a 12% increase from Wednesday’s opening price. 

Where to invest $1,000 right now...

Before you consider buying Centene, you'll want to see this.

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And it's not Centene.

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Keith say’s he thinks investors will be able to turn a small $50 stake into $150,000.

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But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.

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