1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 114
UnitedHealth Group (NYSE:UNH), a Minnesota-based company, is a diversified healthcare company that operates through two main segments: UnitedHealthcare and Optum. At its core, UnitedHealth Group provides health insurance coverage and healthcare services to millions of individuals and businesses across the United States.
Since 2011, UnitedHealth’s revenue has more than tripled, growing from just over $101 billion to nearly $372 billion by 2023. In the second quarter of 2024, the company reported $98.8 billion in revenue, a 6.41% increase from the same quarter the previous year. Additionally, its operating cash flow reached $6.7 billion,
United Health Group has drawn investors through its expansion into sectors like home healthcare and analytics, diversifying its operations to offer more value to partners and patients. Andvari Associates emphasized these strengths in its Q2 2024 investor letter and said:
“UnitedHealth Group Incorporated (NYSE:UNH) is one of the largest providers and distributors of services in the $5 trillion U.S. healthcare market. The company provides services to employers, individuals, and those eligible for Medicare and Medicaid. United’s Optum segment provides pharmacy benefit services and a slate of other insights and services to the major players in the healthcare space: physicians, hospitals, government agencies, and life science companies.
This is a company that provides essential services and has a strong wind at its back. Over two million people enroll in Medicare and Medicare Advantage every year. With the increase in healthcare spending every year, the value of the services and insights provided by Optum will only increase. United is a solid business with high teen returns on its capital. After reinvesting in its businesses, United will likely return $16 billion in 2024 in the form of dividends and share repurchases off a revenue base of ~$380 billion.”
As of Q2 2024, around 114 hedge fund holders held stakes in the stock with Fisher Asset Management being the largest stakeholder with shares worth $1,573,649,573. Analysts are also bullish on UNH giving it a Strong Buy rating. 16 Wall Street analysts have set a 12-month price target for UnitedHealth, with an average target of $571.47. The forecasts range from a high of $635.00 to a low of $481.00. This average target indicates a -0.61% change from the current price of $575.00.
“Overall, UNH ranks first among the best healthcare stocks to buy according to hedge funds. 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.”
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