Investment management company Vulcan Value Partners recently released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In 2024, the US economy was stronger than expected; the large-cap stocks led the robust U.S. equities markets. Although it is still excessively high, inflation did decrease throughout the course of the year. The largest market cap U.S. Companies performed better than the whole market. Lastly, U.S. stocks outperformed the majority of equities in non-U.S. markets. During Q4 and 2024, Focus and Focus Plus were the best performing strategies while Small Cap was the worst performing. However, all strategies had positive returns for the year. In the quarter, the Large Cap Composite returned -0.1% net of fees and expenses, the Small Cap Composite returned -7.3% net, the Focus Composite returned 6.3% net, the Focus Plus composite returned 7.4% and the All-Cap Composite returned -2.5% net. For more information on the fund’s best picks in 2024, please check its top five holdings.
Vulcan Value Partners highlighted stocks like Elevance Health, Inc. (NYSE:ELV) in the fourth quarter 2024 investor letter. Elevance Health, Inc. (NYSE:ELV) is a health benefits company that operates through Health Benefits, CarelonRx, Carelon Services, and Corporate & Other segments. The one-month return of Elevance Health, Inc. (NYSE:ELV) was 5.12%, and its shares lost 17.91% of their value over the last 52 weeks. On January 16, 2025, Elevance Health, Inc. (NYSE:ELV) stock closed at $385.26 per share with a market capitalization of $89.35 billion.
Vulcan Value Partners stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q4 2024 investor letter:
“There were no material contributors to performance. There were two material detractors: Elevance Health, Inc. (NYSE:ELV) and Qorvo Inc. Elevance Health is the second largest healthcare insurance company in the United States. Following a long pause due to the Covid pandemic, states began redetermining Medicaid eligibility in early 2023. Cancellations of Medicaid coverage were higher than anticipated, and the remaining Medicaid population is now older and sicker, resulting in higher-than-expected costs. This negative mix shift has caused Elevance’s medical loss ratio to be higher, resulting in lower margins. States set Medicaid reimbursement rates using data that is on a 12- to 18-month lag, so these higher costs are not yet reflected in their rates. Elevance is confident that, over time, Medicaid rates will be reset and profitability in its Medicaid business will be restored. We believe this is a short-term challenge, but the long-term outlook remains promising. We added to our position during the quarter.”
A medical professional working at a computer, utilizing the company’s digital solutions to improve care quality for consumers.
Elevance Health, Inc. (NYSE:ELV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held Elevance Health, Inc. (NYSE:ELV) at the end of the third quarter which was 73 in the previous quarter. While we acknowledge the potential of Elevance Health, Inc. (NYSE:ELV) 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 Elevance Health, Inc. (NYSE:ELV) and shared Oakmark Equity and Income Fund’s views on the company. In addition, please check out our hedge fund investor letters Q4 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.