Baron Funds, an investment management company, released its “Baron Health Care Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund declined 2.55% (Institutional Shares) in the quarter compared to a 1.02% decline for the Russell 3000 Health Care Index (benchmark) and a 3.22% gain for the Russell 3000 Index (the Index). The underperformance in the quarter was due to active sub-industry/market cap weights. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Health Care Fund highlighted stocks like UnitedHealth Group Incorporated (NYSE:UNH), in the second quarter 2024 investor letter. UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company that operates through UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx segments. The one-month return of UnitedHealth Group Incorporated (NYSE:UNH) was 17.37%, and its shares gained 13.93% of their value over the last 52 weeks. On August 1, 2024, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $572.77 per share with a market capitalization of $527.169 billion.
Baron Health Care Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2024 investor letter:
“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. UnitedHealth Group Incorporated (NYSE:UNH) should see healthy MA enrollment growth as plans that bid aggressively to gain members in 2024 will be forced to cut benefits and/or raise prices to restore margins. 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.”
A senior healthcare professional giving advice to a patient in a clinic.
UnitedHealth Group Incorporated (NYSE:UNH) is in 22nd position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the first quarter which was 113 in the previous quarter. Revenues of UnitedHealth Group Incorporated (NYSE:UNH) increased by about $14 billion in the first half of the year because of solid contributions from across the company, led by double-digit growth at Optum (see the details here). While we acknowledge the potential of UnitedHealth Group Incorporated (NYSE:UNH) as an investment, 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed UnitedHealth Group Incorporated (NYSE:UNH) and shared the list of best health insurance stocks to buy. Andvari Associates added UnitedHealth Group Incorporated (NYSE:UNH)to its portfolio in Q2 2024. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
