1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 104
UnitedHealth Group Incorporated (NYSE:UNH), headquartered in Minnetonka, Minnesota, is a leading American multinational corporation specializing in managed healthcare and insurance services. It operates as a for-profit entity and is divided into four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx.
Financial institutions are keeping a close eye on UnitedHealth Group Incorporated (NYSE:UNH)’s performance, with analysts predicting continued growth and profitability. Notably, Piper Sandler recently maintained an Overweight rating on UNH shares, highlighting a positive outlook for the company’s expansion in the Medicare Advantage sector.
In Q1 2024, Insider Monkey’s research revealed that 104 hedge funds held stakes in UnitedHealth Group Incorporated (NYSE:UNH). The largest stakeholder was Ken Fisher’s Fisher Asset Management, with a $1.4 billion investment.
Despite its strong performance, UnitedHealth Group Incorporated (NYSE:UNH) has faced challenges, including a cyberattack on its technology unit that exploited a vulnerability in Citrix software. Additionally, UnitedHealth Group Incorporated (NYSE:UNH) recently reported issues with Medicaid enrollment, which has caused disruptions in reimbursement rates and led to an overall decline in health insurer stocks.
Baron Funds stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its first quarter 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) is a leading health insurance company that operates across four segments: United Healthcare, Optum Health, OptumInsight, and OptumRX. Shares fell alongside other managed care organizations (MCOs) due to patient utilization of Medicare Advantage (MA) that was higher than consensus forecasts, raising concerns that MCOs had mispriced 2024 bids and could suffer margin compression as a result. In addition, the industry is facing headwinds from MA reimbursement cuts and Star Rating changes. While management said higher cost trends are mostly transitory and reflected in its bidding, and 2024 guidance was roughly in line with consensus, investors took a more cautious wait-and-see approach. We believe UnitedHealth should remain a core portfolio holding, as it is a way to play positive demographic, population health, and value-based reimbursement trends. Despite its size, we think the company should be able to grow earnings consistent with its 13% to 16% long-term EPS annual target, the fastest among major MCOs.”
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