7. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders as of Q4: 150
Millennium Management’s Equity Stake: $571.95 Million
Upside Potential as of April 26: 35.56%
UnitedHealth Group Incorporated (NYSE:UNH) is an American multinational for-profit company specializing in health insurance and healthcare services, headquartered in Eden Prairie, Minnesota. Operating through its two primary businesses, UnitedHealthcare for insurance products and Optum for healthcare services, the company stands as the world’s ninth-largest by revenue and the largest healthcare company globally based on revenue. Despite its dominant market position, the company recently faced significant challenges that shook investor confidence.
In its latest earnings report, UnitedHealth Group Incorporated (NYSE:UNH) surprised investors with an “unusual and unacceptable” earnings miss, as per its CEO. The company reported adjusted earnings of $7.20 per share for the quarter, falling short of analysts’ expectations of $7.29 per share. This disappointing performance triggered a sharp market reaction, with UnitedHealth shares plunging 23% in heavy trading, causing a ripple effect throughout the healthcare sector.
Adding to concerns, UnitedHealth Group Incorporated (NYSE:UNH) revised its full-year outlook downward. It now expects 2025 adjusted profit per share to range between $26 and $26.50, a significant cut from its previous guidance of $29.50 to $30 per share. Analysts had anticipated a 2025 profit closer to $29.73 per share. The lowered forecast was attributed to higher-than-expected medical costs, underscoring the financial pressures currently facing the company even as it maintains its leadership position in the global healthcare market.
As of Q4 2024, Millennium Management significantly increased its holdings in UnitedHealth Group Incorporated (NYSE:UNH) to over 1.13 million shares, marking a 344% rise from 254,818 shares in Q3. The fund’s stake in the company is now valued at approximately $571 million. Insider Monkey’s database indicated that 150 hedge funds out of the 1,009 funds held stakes in the company at the end of Q4 2024, with a value of nearly $15.98 billion, as opposed to 112 funds in Q3. This surge in institutional interest underscores strong confidence in the stock’s long-term growth and suggests optimism about the company to maintain profitability in a competitive financial sector.
Parnassus Growth Equity Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:
“We sold two Health Care positions during the quarter, pharmaceutical company AstraZeneca and insurer UnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth’s business model is becoming higher-risk, which coupled with slowing Medicare Advantage growth and regulatory uncertainty led to us exiting the position.
After the UnitedHealth stock price recovered to its historical multiple in early November, we felt it was an opportune time to sell based on our concerns about slowing Medicare Advantage growth and the company’s growing business complexity and risk.”
