10 Worst Performing Stocks in S&P 500 in 2024

5. Humana Inc. (NYSE:HUM)

Number of Hedge Fund Holders: 71

Year-to-Date Share Price Performance: -45%

Humana Inc. (NYSE:HUM) provides medical and specialty insurance products in the U.S. through two segments: Insurance and CenterWell. It offers medical and supplemental benefit plans, manages the Limited Income Newly Eligible Transition prescription drug plan, and partners with states for Medicaid and long-term support services.

The company also provides commercial health insurance, including dental and vision coverage, along with military services and pharmacy benefit management. It operates pharmacies and primary care centers, as well as home health services.

Humana (NYSE:HUM) started the year in red and was down over 20% by the second quarter. However, it fell significantly after the second quarter despite beating the Wall Street estimates. At the quarter’s earnings call, CEO James Rechtin acknowledged ongoing external challenges but maintained that the company’s fundamentals remain strong.

The company exceeded expectations, yet faced medical cost pressures, especially due to higher-than-expected inpatient admissions. The Medicare segment performed well, with an increased forecast of 75,000 additional members, representing a 4% annual growth. However, rising inpatient costs created significant pressure, which is expected to continue.

Rechtin also noted advancements in managing administrative costs, automation efforts, and partnerships aimed at improving efficiency and consumer experiences. Despite the difficulties, he remains confident in the company’s long-term outlook and reaffirmed guidance for adjusted EPS and benefit ratios for 2024, while expecting continued pressure from high inpatient costs into 2025.

In summary, while there are positive developments, the company faces significant operational challenges.