In this article, we discuss the 10 Best Healthcare Stocks to Buy According to Billionaires.
Healthcare stocks experienced a challenging year in 2024, lagging behind high-growth sectors like tech and AI. Market uncertainties and policy challenges also created obstacles for certain segments within the industry. In the first half of the year, investors focused on technology and communication services, drawing attention away from healthcare. While the sector showed some improvement in the latter half as the market rally expanded, certain segments continued to struggle with supply and demand imbalances caused by the pandemic. One major factor was the increased demand for delayed medical procedures, as patients sought treatments they had postponed. This benefited healthcare facilities and medical device manufacturers but put financial pressure on managed-care insurers.
Additionally, companies specializing in life sciences tools and services faced lower demand, as COVID-19 testing declined and pandemic-related inventory levels were still being reduced. Policy concerns also weighed on the sector, particularly for insurers offering Medicare Advantage plans, as reimbursement rates fell short. Uncertainty surrounding upcoming elections further contributed to the healthcare sector’s struggles. On a positive note, innovation remained strong, as the biotech industry saw promising clinical developments, and advancements in treatments for conditions like obesity and diabetes fueled significant growth in the pharmaceutical sector.
In the first quarter of 2025, healthcare stocks were among the strongest performers in the S&P index, outpacing the broader market. This marks a sharp contrast to their struggles in recent years. In 2024, the healthcare sector saw a modest gain of 2.06%, trailing the market’s 25.02% return. A similar pattern was seen in 2023, with healthcare stocks rising just 2% while the overall market climbed 26%. Despite these challenges, healthcare remains a vital part of the economy, driven by increasing demand for medical products and services as the population ages. It is the fourth largest sector in the market, following technology, financials, and consumer discretionary. In the Russell MidCap Index, which tracks about 800 companies, healthcare ranks fifth, while in the small-cap Russell Index, it holds the third spot behind industrials and financials. Rob Haworth, senior investment strategy director for US Bank Asset Management, said:
“Investors can gain exposure to the healthcare sector by owning the S&P 500 through a passively managed index fund or ETF. Investors may also want to take a more selective approach, as the record demonstrates there can be varied performance within the healthcare sector.”
Investors are taking a cautious approach as they assess potential policy shifts under the new administration. With a change in leadership at the Department of Health and Human Services, major healthcare companies could face greater scrutiny and may need to adjust to evolving policies.
As the Trump administration’s policies come into focus, concerns are emerging over potential budget cuts that could directly affect healthcare organizations. With the Department of Government Efficiency tasked with cutting $1 trillion from a $6 trillion budget, reductions in healthcare spending appear likely. On January 17, the House Ways and Means Committee released a list of possible cuts to support the extension of the 2017 Tax Cuts and Jobs Act. Among the proposals are eliminating the tax-exempt status of municipal bonds and potentially revoking the nonprofit status of hospitals and health systems. At the same time, hospital mergers and acquisitions have been steadily rebounding from pandemic-era lows, despite strict federal antitrust policies. However, it remains to be seen how future changes in regulatory leadership might influence M&A activity.
Despite policy concerns, some billionaire investors remain confident in the healthcare sector’s future. Carl Cook, with an estimated net worth of $10.3 billion, is among the wealthiest figures in the healthcare industry. He took over as CEO of his family’s medical device company in 2011 following his father’s death. In 2017, the company sold one of its subsidiaries to a drug delivery technology firm for $950 million. Cook also serves as president of a life sciences division focused on developing a cell therapy for urinary incontinence. Another billionaire investor in the healthcare sector is Ronda Stryker, with a net worth of $8.4 billion. Known for her contributions to medical technology and philanthropy, she has played a major role in advancing healthcare innovation. As the granddaughter of Dr. Homer Stryker, founder of a medical technology firm, she is committed to improving lives through medical advancements and social initiatives. With this outlook in mind, let’s take a look at some of the best healthcare stocks billionaires are buying.
A healthcare provider holding an MRI scan of a patient with a traumatic brain injury.
Our Methodology
To collect data for this article, we scanned Insider Monkey’s database of billionaires’ stock holdings and picked the top 10 companies operating in the healthcare sector with the highest number of billionaire investors in Q4 of 2024. The stocks are ranked in ascending order based on the number of billionaire investors. We have also mentioned the value of billionaire holdings for further insight.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Universal Health Services, Inc. (NYSE:UHS)
Number of Billionaire Investors: 17
Value of Billionaire Holdings: $769.9 million
Universal Health Services, Inc. (NYSE:UHS) operates acute care hospitals, outpatient centers, and behavioral health facilities. It has two main segments – Acute Care Hospital Services and Behavioral Health Care Services. On March 26, Morgan Stanley began coverage of the stock with an Equal Weight rating and a $200 price target. The firm appreciated the solid performance of UHS and its return to a more stable business environment after pandemic-related challenges.
Universal Health Services, Inc. (NYSE:UHS) reported earnings of $4.96 per diluted share for Q4 2024. Adjusted admissions at its acute care hospitals rose 2.2% year-over-year, contributing to an 8.7% increase in net revenue for the segment. Behavioral health hospital revenue grew 11.1%, mainly due to an 8.7% increase in revenue per adjusted patient day. The operating cash flow for Q4 reached $658 million, up from $452 million in the prior year, while full-year 2024 operating cash flow amounted to $2.07 billion, compared to $1.27 billion in 2023. Capital expenditures for 2024 totaled $944 million, aligning with the company’s estimates.
On February 3, Universal Health Services, Inc. (NYSE:UHS) announced its inclusion in Fortune’s 2025 list of the “World’s Most Admired Companies.” The ranking, based on a survey of over 3,300 executives, directors, and analysts, recognizes companies for their financial management, service quality, and dedication to social responsibility. Often considered a benchmark for corporate reputation, this recognition further solidifies Universal Health Services’ position among the best healthcare stocks for investors seeking strong and reputable firms in the industry.
9. CVS Health Corporation (NYSE:CVS)
Number of Billionaire Investors: 17
Value of Billionaire Holdings: $1.5 billion
CVS Health Corporation (NYSE:CVS), based in Rhode Island, offers healthcare services across the United States through its Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness segments. On March 20, CVS declared a quarterly dividend of $0.665 per share, payable on May 1, 2025, to shareholders recorded by April 22, 2025.
In the fourth quarter of 2024, CVS Health Corporation (NYSE:CVS) reported nearly $98 billion in revenue, reflecting a 4% increase from the previous year, driven by growth in its healthcare benefits and pharmacy and consumer wellness segments. The company posted an adjusted operating income of over $2.7 billion and an adjusted EPS of $1.19, supported by strong performance across different business areas and favorable reserve development in its Aetna segment. For the full year, operating cash flow reached approximately $9.1 billion, boosted by early cash receipts, particularly in the pharmacy services division.
On March 4, CVS Health Corporation (NYSE:CVS) announced that Wellvana has acquired its Medicare Shared Savings Program (MSSP) business, previously part of CVS Accountable Care, through an all-stock deal. As a result, CVS Health now holds a strategic minority stake in Wellvana.
CVS Health Corporation (NYSE:CVS) is one of the best healthcare stocks, as it is favored by 17 billionaire investors.
