1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 112
UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company with two main segments: UnitedHealthcare and Optum. The company provides health insurance across the U.S., offering various plans and partnering with over 1.3 million healthcare providers and 6,700 hospitals. Optum focuses on healthcare services powered by technology and data analytics, supporting people, partners, and providers to enhance health outcomes.
UnitedHealth Group Incorporated (NYSE:UNH) has introduced a new national gold card scheme to lower administrative costs and raise the standard of care. For eligible in-network providers, this program will result in a 500,000 yearly decrease in prior authorizations.
AI is also significantly contributing to increased productivity and better patient care for UnitedHealth Group Incorporated (NYSE:UNH). AI is being used by advanced practice physicians to compile patient histories, which frees up time for more hands-on patient care. To improve service and save time, nurses are employing GenAI to evaluate documentation more effectively. Additionally, it powers provider searches and client contacts, freeing up advocates to concentrate on more intricate questions and enhance the customer experience.
UnitedHealth Group Incorporated (NYSE:UNH) generated $100.82 billion in revenue in the third quarter of 2024, a 9.16% increase over the same period the previous year. Strong pharmacy care offerings, increased pharmacy benefits management from new clients, and growing specialized services drove OptumRx’s $5 billion increase in revenue to over $34 billion. Revenues from OptumInsight remained steady at about $5 billion, and the approximately $33 billion revenue backlog grew by over $1 billion over the previous year.
Invesco Growth and Income Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH): Like many managed care providers, United Health has come under pressure from rising medical costs and higher-than-expected utilization. The stock is currently undervalued based on our analysis. We view the company as a high-quality compounder with secular growth opportunities in the managed care segment. The US Presidential election may cause additional near-term uncertainty, but we believe United Health will be able to rebound once pricing and utilization issues normalize.”
Overall, UNH ranks first among the 8 most promising stocks 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 UNH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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