1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 114
UnitedHealth Group Incorporated (NYSE:UNH) ranks first on our list of the best defensive stocks according to Reddit. It is a multinational health insurance and services company that provides health coverage to over 50 million people in the United States. UnitedHealth Group Incorporated (NYSE:UNH) owns a range of subsidiaries including UnitedHealthcare Servic LLC, Optum, Change Healthcare, and United Health Foundation, to name a few.
In about a decade, UnitedHealth Group Incorporated (NYSE:UNH) has grown its revenue from $101 billion in 2011 to $372 billion in 2023. While the growth trajectory is great, UnitedHealth is also proactive in providing healthcare to patients and pre-patients alike. In the past year, UnitedHealth’s professionals made over 2 million home visits to identify health emergencies that would have gone undiagnosed otherwise.
In the second quarter of 2024, UnitedHealth Group Incorporated (NYSE:UNH) logged $98.9 billion in revenue, up by nearly $6 billion. The company has a huge opportunity to grow as the healthcare market in the United States is currently valued at $5 trillion, with multiple areas yet to be explored. That said, the company believes it can post strong results in 2025, which is evident from its client base of 148 million.
Analysts are bullish on UNH and their 12-month median price target of $620 points to a 4% upside from current levels. Overall, 114 investors were bullish on the stock at the end of Q2 2024, with total stakes amounting to $12.5 billion. As of June 30, Fisher Asset Management was the largest shareholder with a position worth $1.57 billion.
Invesco Distributors, Inc. 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.”
While we acknowledge the potential of healthcare companies, 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 more promising than the stocks on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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