Top 5 Managed Healthcare Companies with Jaw-Dropping Earnings Turnarounds in 2026! | FAST Graphs

5 Managed Healthcare Companies
Chuck Carnevale of FAST Graphs analyzes the top managed healthcare companies following an unprecedented earnings collapse in 2025. Historically consistent earnings growers suddenly experienced sharp declines, prompting the key question for investors: are these stocks value opportunities or value traps?

Chuck emphasizes his value-investing philosophy—fundamentals first, price second—and explains that the sector’s earnings decline was driven by a “perfect storm” of surging medical and pharmaceutical costs, regulatory pressures, margin compression, operational missteps, and most importantly, COVID-related morbidity miscalculations. Claims payouts far exceeded expectations, severely hurting profitability even as revenues remained strong.

The Managed Healthcare Companies reviewed are Centene, Elevance (formerly Anthem), Humana, Molina Healthcare, and UnitedHealth Group. Despite earnings stress, most maintain investment-grade balance sheets, reasonable debt levels (generally under 50% of capital), and strong revenue growth. However, earnings dropped sharply—especially for Centene and UnitedHealth—causing stock prices to follow fundamentals downward.

Chuck notes that these companies are now aggressively investing in AI, digital transformation, cost containment, and actuarial recalibration to restore margins. Analysts expect earnings recoveries beginning in 2026–2027, making the group attractive but speculative value plays.

Company highlights:

Centene suffered a dramatic ~72% earnings collapse due to mispriced morbidity assumptions. Analysts forecast a strong rebound, offering high upside—but with significant risk and no dividend.

Elevance stands out as the most stable and attractive option. Earnings declines were modest, profitability remained strong, and the company continues growing its dividend. Carnevale calls this his favorite in the group.

Humana faces a slower recovery tied to Medicare Advantage but offers solid long-term potential, a covered dividend, and strong free cash flow.

Molina is the smallest, least profitable, and most speculative, with no dividend and higher risk.

UnitedHealth Group, the industry giant, saw earnings and price fall sharply after years of premium valuation. While still high quality, Carnevale sees less upside compared to peers due to valuation recovery already underway.

As a contrast, Carnevale discusses Cigna, which is not a pure managed care company but far more diversified. Cigna avoided severe earnings stress, offers an 11% earnings yield and a well-covered 2.2% dividend, and represents a safer, conservative value investment.

Bottom line: Managed healthcare stocks offer speculative recovery opportunities after COVID-driven earnings stress, while Cigna provides a more stable value alternative. Investors should weigh risk carefully, recognize much of the rebound has already occurred, and conduct their own due diligence.

Time Codes:
0:00 – Introduction by Chuck Carnevale, aka Mr. Valuation
4:20 – Centene Corp (CNC)
7:02 – Elevance Health Inc (ELV)
9:27 – Humana (HUM)
10:20 – Molina Healthcare (MOH)
10:52 – UnitedHealth Group (UNH)
11:30 – Centene Corp (CNC)
13:22 - Elevance Health Inc (ELV)
15:00 - Humana (HUM)
17:10 - Molina Healthcare (MOH)
17:36 - UnitedHealth Group (UNH)
19:48 – Cigna Group (CI)
22:27 – Closing Remarks by Chuck Carnevale


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