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Greenlight Capital, an investment management firm, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In 2024, the Greenlight Capital funds returned 7.2% net of fees and expenses, compared to 25.0% for the S&P 500 index. The Partnerships have returned 3,117% cumulatively or 12.9% annualized both net of fees and expenses, since its inception in May 1996. The S&P 500 index has returned 1,421% or 10.0% annualized, over the same period. Election uncertainty dominated 2024, and now that the election is over, it seems like there is more uncertainty than ever before. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Greenlight Capital highlighted stocks like Centene Corporation (NYSE:CNC) in the Q4 2024 investor letter. Centene Corporation (NYSE:CNC) is a healthcare enterprise that offers services to under-insured and uninsured families, commercial organizations, and military families. The one-month return of Centene Corporation (NYSE:CNC) was 4.30%, and its shares lost 13.62% of their value over the last 52 weeks. On January 22, 2025, Centene Corporation (NYSE:CNC) stock closed at $63.53 per share with a market capitalization of $32.074 billion.
Greenlight Capital stated the following regarding Centene Corporation (NYSE:CNC) in its Q4 2024 investor letter:
"We established a new medium-sized position in CNH Industrial (CNH) and a small position in Centene Corporation (NYSE:CNC). CNC is the largest Managed Medicaid company. Shares are trading at a historically low valuation despite the company currently significantly underearning in its Medicaid book. This valuation disconnect is driven by concerns about the impact of a likely non-extension of enhanced ACA exchange subsidies beyond 2025 on CNC’s exchange business, as well as potential attempts by the incoming Trump administration to make adverse changes to the Medicaid program. We think a repricing in the core Medicaid business over the next two years could more than offset some of these potential headwinds, which are not guaranteed to materialize. We acquired our shares at an average price of $60.54, or about 9x current earnings. Management and the board are taking advantage of the situation by sharply ramping up share repurchases, as well as making large personal stock purchases. CNC ended the year at $60.58."
A doctor holding a clipboard in a hospital ward, discussing patient treatment plan with the nurses.
Centene Corporation (NYSE:CNC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held Centene Corporation (NYSE:CNC) at the end of the third quarter which was 48 in the previous quarter. While we acknowledge the potential of Centene Corporation (NYSE:CNC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.