What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies. Negative P/B indicates book equity has been reduced by buybacks — common in highly profitable capital-return businesses.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Centene Corporation operates as a managed care company that provides programs and services to under-insured families, and commercial organizations in the United States. It operates through four segments: Medicaid, Medicare, Commercial, and Other. The Medicaid segment offers the temporary assistance for needy families; medicaid expansion; aged, blind, or disabled; and children's health insurance programs, as well as long-term services and supports; foster care; and medicare-medicaid plans. This segment also provides healthcare products and services. The Medicare segment offers special needs and medicare supplement, and prescription drug plans. The Commercial segment provides health insurance marketplace product for individual and commercial group. The Other segment operates clinical healthcare and pharmacies, as well as offers vision and dental, behavioral health, and centralized services. It provides services through primary and specialty care physicians, hospitals, behavioral health practitioners, and ancillary providers. The company was founded in 1984 and is headquartered in Saint Louis, Missouri.
Showing Key Metrics
Income Highlights
Metric
2025
2024
2023
2022
2021
Gross Profit %
7.1%▼
10.3%
11.2%
11.5%
N/A
Operating Margin %
-0.2%▼
2.0%
2.2%
2.5%
N/A
Net Income %
-3.4%▼
2.0%
1.8%
0.8%
N/A
Diluted EPS
-13.53▼
6.31
4.95
2.07
N/A
Balance Sheet Highlights
Metric
2025
2024
2023
2022
2021
Total Assets
$76.7B
$82.4B
$84.6B
$76.9B
N/A
Total Debt
$18.2B↓
$19.4B
$18.9B
$21.3B
N/A
Working Capital
$3.7B▼
$3.7B
$4.0B
$1.7B
N/A
Years to Pay Debt
-2.72
5.88
6.99
17.75
N/A
Cash Flow Highlights
Metric
2025
2024
2023
2022
2021
Free Cash Flow
$4.3B▲
-$490M
$7.3B
$5.3B
N/A
Owner Earnings
-$4.6B
$5.2B
$4.8B
$3.6B
N/A
CapEx % of Net Income
N/A
19.5%
29.6%
83.5%
N/A
Income Statement
2025
2024
2023
2022
2021
Tax Effect Of Unusual Items
-43,496
400,628
216,000
-390,483
Tax Rate For Calcs
0
0
0
0
Normalized EBITDA
963,000
4,429,000
4,752,000
5,067,000
Total Unusual Items
-5,738,000
1,771,000
864,000
-1,009,000
Total Unusual Items Excluding Goodwill
-5,738,000
1,771,000
864,000
-1,009,000
Net Income From Continuing Operation Net Minority Interest
-6,674,000
3,305,000
2,702,000
1,202,000
Reconciled Depreciation
1,275,000
1,241,000
1,293,000
1,430,000
Reconciled Cost Of Revenue
180,910,000
146,242,000
136,684,000
127,892,000
EBITDA
-4,775,000
6,200,000
5,616,000
4,058,000
EBIT
-6,050,000
4,959,000
4,323,000
2,627,000
Net Interest Income
-678,000
-702,000
-725,000
-665,000
Interest Expense
678,000
702,000
725,000
665,000
Normalized Income
-979,496
1,934,628
2,054,000
1,820,517
Net Income From Continuing And Discontinued Operation
-6,674,000
3,305,000
2,702,000
1,202,000
Total Expenses
195,089,000
159,883,000
150,540,000
140,911,000
Total Operating Income As Reported
-7,623,000
3,175,000
2,930,000
1,318,000
Diluted Average Shares
493,116
523,744
545,704
582,040
Basic Average Shares
493,116
521,790
543,319
575,191
Diluted EPS
0
0
0
0
Basic EPS
0
0
0
0
Diluted NI Availto Com Stockholders
-6,674,000
3,305,000
2,702,000
1,202,000
Net Income Common Stockholders
-6,674,000
3,305,000
2,702,000
1,202,000
Net Income
-6,674,000
3,305,000
2,702,000
1,202,000
Minority Interests
3,000
11,000
3,000
0
Net Income Including Noncontrolling Interests
-6,677,000
3,294,000
2,699,000
1,202,000
Net Income Continuous Operations
-6,677,000
3,294,000
2,699,000
1,202,000
Tax Provision
-51,000
963,000
899,000
760,000
Pretax Income
-6,728,000
4,257,000
3,598,000
1,962,000
Other Income Expense
-5,738,000
1,771,000
864,000
-1,009,000
Special Income Charges
-7,310,000
-13,000
-529,000
-2,288,000
Other Special Charges
-1,000
-30,000
1,375,000
Write Off
20,000
13,000
529,000
2,318,000
Impairment Of Capital Assets
7,291,000
Gain On Sale Of Security
1,572,000
1,784,000
1,393,000
1,279,000
Net Non Operating Interest Income Expense
-678,000
-702,000
-725,000
-665,000
Interest Expense Non Operating
678,000
702,000
725,000
665,000
Operating Income
-312,000
3,188,000
3,459,000
3,636,000
Operating Expense
14,179,000
13,641,000
13,856,000
13,020,000
Depreciation Amortization Depletion Income Statement
1,275,000
1,241,000
1,293,000
1,431,000
Depreciation And Amortization In Income Statement
1,275,000
1,241,000
1,293,000
1,431,000
Amortization
685,000
692,000
718,000
817,000
Amortization Of Intangibles Income Statement
685,000
692,000
718,000
817,000
Depreciation Income Statement
590,000
549,000
575,000
614,000
Selling General And Administration
12,904,000
12,400,000
12,563,000
11,589,000
General And Administrative Expense
10,166,000
Other Gand A
10,166,000
Gross Profit
13,867,000
16,829,000
17,315,000
16,656,000
Cost Of Revenue
180,910,000
146,242,000
136,684,000
127,891,000
Total Revenue
194,777,000
163,071,000
153,999,000
144,547,000
Excise Taxes
-20,196,000
-17,566,000
-13,904,000
-9,068,000
Operating Revenue
174,581,000
145,505,000
140,095,000
135,479,000
Balance Sheet
2025
2024
2023
2022
2021
Treasury Shares Number
131,706
124,288
80,807
57,093
Ordinary Shares Number
491,757
495,907
534,484
550,754
Share Issued
623,463
620,195
615,291
607,847
Net Debt
4,470,000
636,000
5,946,000
5,720,000
Total Debt
18,162,000
19,429,000
18,877,000
21,333,000
Tangible Book Value
4,588,000
3,443,000
2,181,000
-1,666,000
Invested Capital
37,354,000
44,943,000
43,669,000
42,077,000
Working Capital
3,674,000
3,738,000
4,040,000
1,664,000
Net Tangible Assets
4,588,000
3,443,000
2,181,000
-1,666,000
Capital Lease Obligations
761,000
896,000
1,048,000
3,313,000
Common Stock Equity
19,953,000
26,410,000
25,840,000
24,057,000
Total Capitalization
37,304,000
44,833,000
43,550,000
41,995,000
Total Equity Gross Minority Interest
20,056,000
26,510,000
25,956,000
24,237,000
Minority Interest
103,000
100,000
116,000
180,000
Stockholders Equity
19,953,000
26,410,000
25,840,000
24,057,000
Gains Losses Not Affecting Retained Earnings
-58,000
-504,000
-652,000
-1,132,000
Other Equity Adjustments
-58,000
-504,000
-652,000
-1,132,000
Treasury Stock
9,441,000
8,997,000
5,856,000
4,213,000
Retained Earnings
8,674,000
15,348,000
12,043,000
9,341,000
Additional Paid In Capital
20,777,000
20,562,000
20,304,000
20,060,000
Capital Stock
1,000
1,000
1,000
1,000
Common Stock
1,000
1,000
1,000
1,000
Total Liabilities Net Minority Interest
56,691,000
55,935,000
58,685,000
52,633,000
Total Non Current Liabilities Net Minority Interest
19,995,000
21,674,000
21,969,000
24,169,000
Other Non Current Liabilities
1,196,000
1,829,000
2,738,000
2,483,000
Preferred Securities Outside Stock Equity
82,000
Non Current Deferred Liabilities
833,000
684,000
641,000
615,000
Non Current Deferred Taxes Liabilities
833,000
684,000
641,000
615,000
Long Term Debt And Capital Lease Obligation
17,966,000
19,161,000
18,590,000
21,071,000
Long Term Capital Lease Obligation
615,000
738,000
880,000
3,133,000
Long Term Debt
17,351,000
18,423,000
17,710,000
17,938,000
Current Liabilities
36,696,000
34,261,000
36,716,000
28,464,000
Other Current Liabilities
20,544,000
18,308,000
18,000,000
16,745,000
Current Deferred Revenue
736,000
661,000
715,000
478,000
Current Debt And Capital Lease Obligation
196,000
268,000
287,000
262,000
Current Capital Lease Obligation
146,000
158,000
168,000
180,000
Current Debt
50,000
110,000
119,000
82,000
Other Current Borrowings
50,000
110,000
119,000
82,000
Payables And Accrued Expenses
15,220,000
15,024,000
17,714,000
10,979,000
Payables
15,220,000
15,024,000
17,714,000
10,979,000
Other Payable
1,592,000
2,008,000
1,462,000
1,634,000
Accounts Payable
13,628,000
13,016,000
16,252,000
9,345,000
Total Assets
76,747,000
82,445,000
84,641,000
76,870,000
Total Non Current Assets
36,377,000
44,446,000
43,885,000
46,742,000
Other Non Current Assets
1,623,000
1,624,000
1,525,000
1,349,000
Investments And Advances
17,035,000
17,429,000
16,286,000
14,684,000
Goodwill And Other Intangible Assets
15,365,000
22,967,000
23,659,000
25,723,000
Other Intangible Assets
4,530,000
5,409,000
6,101,000
6,911,000
Goodwill
10,835,000
17,558,000
17,558,000
18,812,000
Net PPE
2,354,000
2,426,000
2,415,000
4,986,000
Accumulated Depreciation
-2,232,000
-2,803,000
-2,400,000
-2,066,000
Gross PPE
4,586,000
5,229,000
4,815,000
7,052,000
Leases
277,000
273,000
252,000
467,000
Other Properties
317,000
359,000
396,000
2,554,000
Machinery Furniture Equipment
3,355,000
3,918,000
3,477,000
3,194,000
Buildings And Improvements
492,000
523,000
534,000
659,000
Land And Improvements
145,000
156,000
156,000
178,000
Current Assets
40,370,000
37,999,000
40,756,000
30,128,000
Other Current Assets
1,945,000
1,601,000
5,572,000
2,461,000
Receivables
18,105,000
19,713,000
15,532,000
13,272,000
Accounts Receivable
18,105,000
19,713,000
15,532,000
13,272,000
Allowance For Doubtful Accounts Receivable
-134,000
-111,000
-120,000
-130,000
Gross Accounts Receivable
18,239,000
19,824,000
15,652,000
13,402,000
Cash Cash Equivalents And Short Term Investments
20,320,000
16,685,000
19,652,000
14,395,000
Other Short Term Investments
2,432,000
2,622,000
2,459,000
2,321,000
Cash And Cash Equivalents
17,888,000
14,063,000
17,193,000
12,074,000
Cash Flow
2025
2024
2023
2022
2021
Free Cash Flow
4,321,000
-490,000
7,254,000
5,257,000
Repurchase Of Capital Stock
-475,000
-3,124,000
-1,633,000
-3,096,000
Repayment Of Debt
-1,895,000
-622,000
-2,316,000
-1,504,000
Issuance Of Debt
750,000
1,300,000
2,335,000
360,000
Issuance Of Capital Stock
37,000
46,000
44,000
70,000
Capital Expenditure
-767,000
-644,000
-799,000
-1,004,000
Interest Paid Supplemental Data
647,000
688,000
688,000
657,000
Income Tax Paid Supplemental Data
448,000
1,002,000
887,000
1,198,000
End Cash Position
17,957,000
14,156,000
17,452,000
12,330,000
Other Cash Adjustment Outside Changein Cash
-138,000
0
-50,000
-16,000
Beginning Cash Position
14,156,000
17,452,000
12,330,000
13,214,000
Effect Of Exchange Rate Changes
0
8,000
-32,000
-11,000
Changes In Cash
3,939,000
-3,304,000
5,204,000
-857,000
Financing Cash Flow
-1,621,000
-2,406,000
-1,658,000
-4,197,000
Cash Flow From Continuing Financing Activities
-1,621,000
-2,406,000
-1,658,000
-4,197,000
Net Other Financing Charges
-38,000
-6,000
-88,000
-27,000
Net Common Stock Issuance
-438,000
-3,078,000
-1,589,000
-3,026,000
Common Stock Payments
-475,000
-3,124,000
-1,633,000
-3,096,000
Common Stock Issuance
37,000
46,000
44,000
70,000
Net Issuance Payments Of Debt
-1,145,000
678,000
19,000
-1,144,000
Net Long Term Debt Issuance
-1,145,000
678,000
19,000
-1,144,000
Long Term Debt Payments
-1,895,000
-622,000
-2,316,000
-1,504,000
Investing Cash Flow
472,000
-1,052,000
-1,191,000
-2,921,000
Cash Flow From Continuing Investing Activities
472,000
-1,052,000
-1,191,000
-2,921,000
Net Other Investing Changes
19,000
Net Investment Purchase And Sale
1,239,000
-1,398,000
-1,099,000
-2,934,000
Sale Of Investment
5,780,000
5,785,000
5,523,000
3,802,000
Purchase Of Investment
-4,541,000
-7,183,000
-6,622,000
-6,736,000
Net Business Purchase And Sale
0
990,000
707,000
1,017,000
Sale Of Business
0
990,000
707,000
2,477,000
Purchase Of Business
0
0
-1,460,000
-534,000
Capital Expenditure Reported
-767,000
-644,000
-799,000
-1,004,000
Operating Cash Flow
5,088,000
154,000
8,053,000
6,261,000
Cash Flow From Continuing Operating Activities
5,088,000
154,000
8,053,000
6,261,000
Change In Working Capital
3,038,000
-4,499,000
3,546,000
2,317,000
Change In Other Working Capital
155,000
18,000
406,000
156,000
Change In Other Current Liabilities
2,290,000
298,000
2,117,000
3,239,000
Change In Other Current Assets
-230,000
46,000
5,000
128,000
Change In Payables And Accrued Expense
-657,000
-528,000
3,398,000
421,000
Change In Receivables
1,480,000
-4,333,000
-2,380,000
-1,627,000
Changes In Account Receivables
1,480,000
-4,333,000
-2,380,000
-1,627,000
Other Non Cash Items
16,000
172,000
-33,000
-332,000
Stock Based Compensation
204,000
212,000
216,000
234,000
Asset Impairment Charge
7,311,000
13,000
529,000
2,318,000
Deferred Tax
-60,000
13,000
-78,000
-631,000
Deferred Income Tax
-60,000
13,000
-78,000
-631,000
Depreciation Amortization Depletion
1,275,000
1,241,000
1,293,000
1,430,000
Depreciation And Amortization
1,275,000
1,241,000
1,293,000
1,430,000
Operating Gains Losses
-3,000
-120,000
-152,000
-576,000
Gain Loss On Sale Of PPE
0
0
221,000
12,000
Gain Loss On Sale Of Business
-2,000
-120,000
-152,000
-772,000
Net Income From Continuing Operations
-6,677,000
3,294,000
2,699,000
1,202,000
These metrics estimate what Centene Corporation is worth based on its fundamentals — independent of what the market currently prices it at.
Graham's Fair Value and NCAV are conservative floors rooted in 1930s–60s principles.
EPV assumes zero growth. None are price targets — they are reference points for judging whether the current price offers a margin of safety.
Graham's Fair Value
N/A (negative EPS)
Margin of Safety
—
Market Cap ÷ Company Value
1.86
P/B Ratio
1.33
Warren's Owner Earnings
-$4.6B
Latest fiscal year
Graham's 7 Criteria
Defensive Investor Checklist
4/7 — Enterprising Investor
✅Adequate Size
$194.8B
vs > $1.5B revenue
❌Strong Financial Condition
1.10x
vs Current Ratio > 2.0x
❌Earnings Stability
1 loss years (4 yrs data)
vs No negative EPS years
❌Dividend Record
No dividend
vs Uninterrupted dividends
✅Earnings Growth
+204.8% EPS growth
vs > 33% EPS growth
✅Moderate P/E Ratio
12.1x
vs P/E ≤ 15.0x
✅Moderate Price-to-Book
1.33x P/B (P/E×P/B: 16.2)
vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5
Graham's 7 Criteria — Explained
What each criterion measures and why it may or may not apply to modern businesses.
✅ Adequate Size — $194.8Bvs > $1.5B revenue
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
"The minimum size of an enterprise should be not less than $100 million of annual sales."
❌ Strong Financial Condition — 1.10xvs Current Ratio > 2.0x
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
"For industrial companies, current assets should be at least twice current liabilities."
❌ Earnings Stability — 1 loss years (4 yrs data)vs No negative EPS years
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
"The company should have shown no deficit in the past ten years."
❌ Dividend Record — No dividendvs Uninterrupted dividends
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
"Some current dividend payments — for at least the past 20 years."
EPS grew from $2.07 to $6.31 over 2 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
"A minimum increase of at least one-third in per-share earnings over ten years."
✅ Moderate P/E Ratio — 12.1xvs P/E ≤ 15.0x
Graham's 15x P/E threshold was calibrated to 1960s market averages when interest rates were higher. Today's lower rate environment structurally supports higher multiples — the S&P 500 long-run average P/E is now closer to 20–25x. A stock trading at 20x is not automatically speculative in the modern context.
"The price-earnings ratio should be no more than 15 times average earnings."
Graham's 1.5x P/B threshold made sense when most company value was tangible. Today, intangible assets — brand, software, patents, network effects — rarely appear on the balance sheet. A high P/B in tech, pharma, or consumer brands often reflects intangible value, not overvaluation. P/FCF or EV/EBITDA are more reliable for asset-light businesses.
"The price should not be more than 1½ times book value. P/E × P/B ≤ 22.5."
Net Current Asset Value
$-33.05
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign.
"Buy at two-thirds of net current assets." — Graham
Earnings Power Value
$-7.02
Per share, no-growth floor. Compare to current price.
Cash Flow Analysis
Metric
2025
2024
2023
2022
2021
Capital Expenditure % of Net Income
N/A
19.5%
29.6%
83.5%
N/A
Repurchase of Capital Stock
-$475M
-$3.1B
-$1.6B
-$3.1B
N/A
Free Cash Flow
$4.3B▲
-$490M▼
$7.3B▲
$5.3B•
N/A•
Warren's Owner Earnings
-$4.6B
$5.2B
$4.8B
$3.6B
N/A
Peers & Industry
No auto-detected peers for Healthcare Plans. You can manually compare CNC against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
0.31%
Low — management has little skin in the game
Return on Equity (ROE)
-33.4%
Weak — poor returns on equity
Return on Assets (ROA)
-8.7%
Poor — assets are not generating adequate returns
Share Buybacks (Latest Year)
$475M
Management is returning capital to shareholders via buybacks
Debt Trend YoY
-6.5% YoY
Debt is declining — management is deleveraging
Leadership Team
Sarah London
CEO & Director
Age 44
Pay: $3,968,565
Andrew Lynn Asher
Executive VP & CFO
Age 56
Pay: $2,709,957
Susan Smith
Chief Operating Officer
Age 49
Pay: $1,309,301
Jennifer Lynch Gilligan
Senior Vice President of Investor Relations
Top Institutional Holders
Institution
% Owned
Shares
Vanguard Group Inc
11.54%
56,978,753
Blackrock Inc.
8.99%
44,396,864
AQR Capital Management, LLC
6.44%
31,798,738
State Street Corporation
4.34%
21,423,835
Geode Capital Management, LLC
2.69%
13,271,492
Invesco Ltd.
1.88%
9,274,586
Harris Associates L.P.
1.83%
9,050,554
Morgan Stanley
1.82%
9,002,570
Risk Analysis
Beta (Market Risk)
1.06
Moderate volatility — moves slightly more than market
Short Interest
3.2% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
0.76x
Conservative balance sheet — low financial risk
Current Ratio
1.12x
Adequate liquidity
52-Week Price Range
Low: $25.08Current: $53.73High: $64.15
Currently at 73% of 52-week range
Centene Corporation (CNC) fundamental analysis — Overall grade D based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: N/A (negative EPS). Gross profit margin: 7.1%. Operating margin: -0.2%. Net margin: -3.4%. Market cap: $26.5B. Sector: Healthcare. Industry: Healthcare Plans. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
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