11 Oversold Blue Chip Stocks to Buy According to Hedge Funds

5. CVS Health Corporation (NYSE:CVS)

% Decline Over Past 1 Year: ~12.6%

Number of Hedge Fund Holders: 74

Market Cap as on March 7: $83.6 billion

CVS Health Corporation (NYSE:CVS) offers health solutions in the US. The company had its stock upgraded by an analyst after it surpassed the quarterly profit expectations by a wide margin, and as it continues to make strides in its pharmacy-benefit-manager business. Leerink Partners analyst Michael Cherny upped the rating on CVS Health Corporation (NYSE:CVS)’s stock to “Buy” from “Market perform,” increasing the price target to $75. As per the analyst, the company continues to benefit from stabilization in its Aetna health-insurance and pharmacy-benefits businesses. In Q4 2024, the company’s GAAP diluted EPS came in at $1.30 and adjusted EPS was $1.19.

CVS Health Corporation (NYSE:CVS) continues to see growth in critical areas of its business, such as the Pharmacy and Consumer Wellness segment, while it addresses the industry-wide challenges that impacted its Health Care Benefits segment. The company’s integrated healthcare model offers a unique value proposition in the market. By owning several components of the healthcare value chain, CVS Health Corporation (NYSE:CVS) can realize cost savings and operational efficiencies which the standalone competitors cannot match.

Ariel Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“Lastly, American healthcare company, CVS Health Corporation (NYSE:CVS) underperformed in the period. The company preannounced a third-quarter preliminary profit estimate materially below consensus expectations and pulled its 2024 guidance due to continued medical cost pressures. Investor concerns around the recently proposed Pharmacy Benefit Management (PBM) legislation further weighed on shares. Despite these challenges, management reiterated its focus on improving margins and enhancing its positioning in Medicare Advantage (MA). CVS believes the program can remain an attractive business for Aetna and CVS Health over time as it implements a multi-year repricing strategy across plan level benefits. Meanwhile, CVS continues to take actions to drive long-term success including the appointment of longtime company executive David Joyner as President and CEO as well as adding four new board members.”