5 Best Insurance Stocks To Buy Now

2. Humana Inc. (NYSE:HUM)

Number of Hedge Fund Holders: 60 

Humana Inc. (NYSE:HUM) operates as a health and well-being firm. On January 11, Bernstein analyst Lance Wilkes kept a Market Perform rating on the stock with a price target of $431. The firm also recently beat market estimates on earnings for the fourth quarter of 2021, driving guidance above expectations for 2022 as well. 

Hedge funds are bullish on Humana Inc. (NYSE:HUM). At the end of the third quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $2.9 billion in Humana Inc. (NYSE:HUM), up from 59 in the preceding quarter worth $3.2 billion. 

In its Q1 2021 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Humana Inc. (NYSE:HUM) was one of them. Here is what the fund said:

“The third new purchase was Humana, the industry leader and near pure play in the fastest growing sector of managed care, Medicare Advantage. Each year, more seniors choose Medicare Advantage over traditional Medicare due to the compelling combination of lower costs and expanded benefits. Humana’s scale advantages and focus on senior care allow the company to make targeted investments in its members’ health, resulting in fewer unnecessary hospitalizations and lower chronic care costs. Much of these savings are then reinvested in the health plan, resulting in a continuously improving customer value proposition. The company’s brand also resonates well in the marketplace and has helped drive double-digit annual membership growth over the past decade—well above the rest of the industry. Further, we believe Humana has a long runway ahead as it benefits from an aging population and continued conversion of the approximately 60% of seniors who are still enrolled in traditional Medicare. Yet Humana’s shares are currently trading at a nearly 20% discount to the S&P 500 earnings multiple, which we believe doesn’t give the company enough credit for its durable competitive advantages and strong secular growth outlook.”