10 Best Falling Stocks To Buy According to Hedge Funds

2. Molina Healthcare, Inc. (NYSE:MOH)

52 Week Range: $282.96 – $423.92

Current Share Price: $289.95

Number of Hedge Fund Holders: 45 

Molina Healthcare, Inc. (NYSE:MOH) is a managed care company that provides health insurance primarily through government programs, including Medicaid and Medicare. It is focused on providing affordable healthcare solutions and generates revenue by offering health insurance plans, which are funded by the government and the company receives payments to manage healthcare services for enrolled individuals.

As of June 30, 2024, the company served around 5.6 million members, which is an 8% increase compared to the same month a year ago. The growth in members resulted in a 17% increase in premium revenue for Molina Healthcare, Inc. (NYSE:MOH) during the second quarter of fiscal 2024. The premium revenue came in at $9.4 billion for the quarter.

As Medicaid and Medicare are government-funded programs they align with the broader trend of rising health care costs thereby projecting strong enrollment and revenue growth for the company.

Management has been focused on winning new contracts to increase its enrollment number. On October 16, Molina Healthcare, Inc. (NYSE:MOH) announced winning a contract to provide a new Dual Eligible Program in Michigan. The contract will increase the pool of dual-eligible beneficiaries, which are members who qualify for both Medicare and Medicaid. This expands their membership base and, consequently, their premium revenue.

Although the stock has been trading close to its 52-week low, hedge funds continued to show their interest in the company. The stock was held by 45 hedge funds in Q2 2024, up from 43 hedge funds during Q1 of 2024, as per Insider Monkey’s database. Thereby making it one of the best falling stocks to buy according to hedge funds.

Fidelity Growth Strategies Fund stated the following regarding Molina Healthcare, Inc. (NYSE:MOH) in its Q2 2024 investor letter:

“On a stock-specific basis, a larger-than-benchmark stake in Molina Healthcare, Inc. (NYSE:MOH) (-28%), a California-headquartered managed care firm, was the biggest relative detractor. The past year has been a difficult one for the managed care industry, due to rising medical costs and government reimbursements that have not kept pace. The past three months, Molina’s stock was dragged down by negative sentiment for the segment, even though its latest earnings report, in April, was better than expected.”