7. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 114
10-year Revenue CAGR: 11.83%
One of the best beginner stocks to buy now, UnitedHealth Group Incorporated (NYSE:UNH) is a Minnesota-based multinational company specializing in health insurance and services. The company operates through four key segments, UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. The UnitedHealthcare segment focuses on providing a broad range of health plans and services, including coverage for large employers, Medicare, and retirement-related services.
The Optum segment is divided into several areas. Optum Health delivers a variety of technology-enabled services that focus on improving patient care and supporting healthcare providers across various settings, whether in person, at home, or through virtual channels.
Optum Insight offers data analytics and insights to enhance clinical operations and drive efficiency. Meanwhile, Optum Rx manages a comprehensive network of medical, pharmacy, and behavioral care services, which includes specialty pharmacies.
UnitedHealth (NYSE:UNH) stands as a leading force in the managed care sector, serving a large membership base both domestically and internationally. As the largest provider of Medicare Advantage plans and one of the biggest health insurers in the U.S., the company’s diversified approach spans various product lines, geographical regions, and customer types.
In the second quarter, it reported revenue of $98.9 billion, a 6.5% increase from the previous year. The company saw strong growth in its Optum divisions, with Optum Rx and Optum Health both achieving revenue increases of 13%, reaching $32 billion and $27 billion, respectively. The healthcare benefits segment also expanded, adding 2.3 million members to reach a total of 29.6 million.
Additionally, the company’s strong financial position is strong as evidenced by its cash flows from operations, which were $6.7 billion for the quarter. The company ended the period with over $31 billion in cash and short-term investments.
On July 17, Argus analyst David Toung raised the price target on UnitedHealth (NYSE:UNH) to $600 from $570 and kept a Buy rating. The analyst mentioned that despite facing challenges such as a temporary cyberattack affecting its claims processing network, the company continues to show resilience.
UnitedHealth (NYSE:UNH) was held by 114 hedge funds in the second quarter and the stakes amounted to $12.535 billion. Fisher Asset Management is the biggest shareholder of the company and has a position worth $1.57 billion as of Q2.
Invesco Growth and Income Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH): Like many managed care providers, United Health has come under pressure from rising medical costs and higher-than-expected utilization. The stock is currently undervalued based on our analysis. We view the company as a high-quality compounder with secular growth opportunities in the managed care segment. The US Presidential election may cause additional near-term uncertainty, but we believe United Health will be able to rebound once pricing and utilization issues normalize.”
