15 Best Stocks to Buy According to Hosking Partners

12. Elevance Health, Inc. (NYSE:ELV)

Hosking Partners’ Stake Value: $56,076,008

Percentage of Hosking Partners’ 13F Portfolio: 2.07%

Number of Hedge Fund Holders: 73

Elevance Health, Inc. (NYSE: ELV) operates as a health benefits company in the United States through its subsidiaries, managing Blue Cross and Blue Shield plans in 14 states and holding licenses to sell health insurance nationwide. The company offers various health plans, including employer-sponsored and individual plans, Medicare Advantage, Medicare supplements, and Medicaid. Recently, Elevance partnered with private equity firm Clayton, Dubilier & Rice (CD&R) to expand its primary care services.

Elevance Health, Inc. (NYSE:ELV) for the second quarter reported GAAP diluted earnings per share of $9.85 and adjusted diluted earnings per share of $10.12, which indicates a year-over-year growth of 12%. At the conclusion of the second quarter, the company had 45.8 million members, primarily due to a decline in Medicaid membership.

The commercial fee-based segment experienced an increase of 354,000 lives compared to the previous year, underscoring the significant value offered to self-insured employers and the robust reputation of the Blue Cross Blue Shield brand. Furthermore, the strategic positioning of Elevance Health, Inc.’s (NYSE:ELV) individual ACA products has effectively facilitated strong and profitable growth.

Baron Health Care Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q2 2024 investor letter:

“We added to the position in Elevance Health, Inc. (NYSE:ELV), a leading managed care company. We think Elevance Health is well positioned to grow earnings double digits driven in part by its growing health care services business. Managed health care stocks continued to be weighed down by Medicare Advantage utilization and reimbursement concerns. Lack of near-term visibility on utilization trends was exacerbated by the Change Healthcare cyberattack, which disrupted payors’ normal utilization review and claims adjudication processes while new CMS rules are restricting the number of lower cost hospital observation stays in favor of full inpatient admissions. We believe our managed care holdings are likely to perform better in the second half of the year as investors look to 2025.

Elevance Health, Inc., with its more balanced member mix, has its own unique and unappreciated growth drivers which include the ongoing scaling of its PBM and Specialty Pharmacy and the continued growth of its Carelon Services. We note a Republican win in the upcoming election could result in a more favorable environment for Medicare Advantage companies after two years of adverse Medicare Advantage rate updates under the Biden administration.”