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Centene (CNC) Sells Circle Health to Boost Managed Care Business
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Centene Corporation (CNC - Free Report) recently closed the divestiture of the Circle Health Group, which boasts the largest private hospital network of the United Kingdom. The deal to sell Circle Health was inked in August 2023 and was expected to close in the first quarter of 2024, thereby meeting the targeted timeline.
The recent announcement is a longstanding endeavor of Centene to intensify focus on expanding its core Managed Care business. The unit provides health plan coverage to individuals via government-subsidized and commercial programs. It usually remains the most significant contributor to the external revenues of CNC, thereby divestitures undertaken by the health insurer seems time opportune as well.
A solid customer base of around 28 million as of Sep 30, 2023, provides an impetus to the performance of the Managed Care unit and contract wins or acquisitions are often a means to boost membership growth of the health insurer.
Though divestitures may seem to be a way to address its own interests, Centene also makes sure to sell the businesses in able hands that would continue to drive its performance in the market. Hence, Circle Health was sold to the largest integrated healthcare network of the Middle East, Pure Health. Divestitures of Apixio, Magellan Specialty Health, Magellan Rx also highlight CNC’s efforts to enhance its promising Managed Care unit.
An announcement by Kroger Health, the healthcare unit of The Kroger Co. (KR - Free Report) and its Family of Pharmacies, was also made on the same day of concluding the Circle Health divestiture, thereby bringing in further optimism for Centene’s Managed Care customers. Kroger Family of Pharmacies will remain in the pharmacy network of Centene in 2024 and as a result, around 700,000 members of the health insurer will enjoy continued access to varied benefits.
The members can be enrolled in either Medicaid, Medicare or the health insurance marketplace plans of Centene. Uninterrupted access to the vast pharmacy network of Kroger, which comprises 2,200-plus pharmacies across 35 states, is expected to retain existing customers and lure new ones into buying CNC’s health insurance plans. The same is also likely to offer increased chances for patients to earn cost savings on important prescriptions.
Shares of Centene have gained 21.2% in the past six months compared with the industry’s 8.5% growth. CNC currently carries a Zacks Rank #2 (Buy).
The bottom line of Amphastar Pharmaceuticals surpassed estimates in each of the last four quarters, the average surprise being 52.06%. The Zacks Consensus Estimate for AMPH’s 2024 earnings indicates 17.7% growth, while the same for revenues suggests a 25.4% rise from their corresponding 2023 estimate. The consensus mark for AMPH's 2024 earnings has moved 3.3% north in the past 60 days.
Novo Nordisk’s earnings beat estimates in two of the trailing four quarters, matched the mark once and missed the same in the remaining one occassion, the average surprise being 0.58%. The Zacks Consensus Estimate for NVO’s 2024 earnings indicates 18.4% growth, while the same for revenues suggests a 16.7% rise from their corresponding 2023 estimate. The consensus mark for NVO’s 2024 earnings has moved 0.6% north in the past 30 days.
The Novo Nordisk stock has gained 33.2% in the past six months. However, the Amphastar Pharmaceuticals stock has declined 4.4% in the same time frame.
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Centene (CNC) Sells Circle Health to Boost Managed Care Business
Centene Corporation (CNC - Free Report) recently closed the divestiture of the Circle Health Group, which boasts the largest private hospital network of the United Kingdom. The deal to sell Circle Health was inked in August 2023 and was expected to close in the first quarter of 2024, thereby meeting the targeted timeline.
The recent announcement is a longstanding endeavor of Centene to intensify focus on expanding its core Managed Care business. The unit provides health plan coverage to individuals via government-subsidized and commercial programs. It usually remains the most significant contributor to the external revenues of CNC, thereby divestitures undertaken by the health insurer seems time opportune as well.
A solid customer base of around 28 million as of Sep 30, 2023, provides an impetus to the performance of the Managed Care unit and contract wins or acquisitions are often a means to boost membership growth of the health insurer.
Though divestitures may seem to be a way to address its own interests, Centene also makes sure to sell the businesses in able hands that would continue to drive its performance in the market. Hence, Circle Health was sold to the largest integrated healthcare network of the Middle East, Pure Health. Divestitures of Apixio, Magellan Specialty Health, Magellan Rx also highlight CNC’s efforts to enhance its promising Managed Care unit.
An announcement by Kroger Health, the healthcare unit of The Kroger Co. (KR - Free Report) and its Family of Pharmacies, was also made on the same day of concluding the Circle Health divestiture, thereby bringing in further optimism for Centene’s Managed Care customers. Kroger Family of Pharmacies will remain in the pharmacy network of Centene in 2024 and as a result, around 700,000 members of the health insurer will enjoy continued access to varied benefits.
The members can be enrolled in either Medicaid, Medicare or the health insurance marketplace plans of Centene. Uninterrupted access to the vast pharmacy network of Kroger, which comprises 2,200-plus pharmacies across 35 states, is expected to retain existing customers and lure new ones into buying CNC’s health insurance plans. The same is also likely to offer increased chances for patients to earn cost savings on important prescriptions.
Shares of Centene have gained 21.2% in the past six months compared with the industry’s 8.5% growth. CNC currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks in the Medical space are Amphastar Pharmaceuticals, Inc. (AMPH - Free Report) and Novo Nordisk A/S (NVO - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Amphastar Pharmaceuticals surpassed estimates in each of the last four quarters, the average surprise being 52.06%. The Zacks Consensus Estimate for AMPH’s 2024 earnings indicates 17.7% growth, while the same for revenues suggests a 25.4% rise from their corresponding 2023 estimate. The consensus mark for AMPH's 2024 earnings has moved 3.3% north in the past 60 days.
Novo Nordisk’s earnings beat estimates in two of the trailing four quarters, matched the mark once and missed the same in the remaining one occassion, the average surprise being 0.58%. The Zacks Consensus Estimate for NVO’s 2024 earnings indicates 18.4% growth, while the same for revenues suggests a 16.7% rise from their corresponding 2023 estimate. The consensus mark for NVO’s 2024 earnings has moved 0.6% north in the past 30 days.
The Novo Nordisk stock has gained 33.2% in the past six months. However, the Amphastar Pharmaceuticals stock has declined 4.4% in the same time frame.