4. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders In Q2 2024: 114
Category: Most popular with HFs and overweight among mutual funds
UnitedHealth Group Incorporated (NYSE:UNH) is one of the biggest health insurance companies in America. The firm serves the needs of roughly 50 million people according to estimates. This means that UnitedHealth Group Incorporated (NYSE:UNH) can benefit from the rapidly evolving pharmaceutical and biotechnology industry which is pushing out revolutionary new treatments such as Sickle Cell Disease and weight loss drugs. However, stable volumes are key for UnitedHealth Group Incorporated (NYSE:UNH) as its $381 billion revenue means that the firm has to keep margins under tight control. The need to control costs was also evident in the firm’s shares before its second quarter earnings. By then, UnitedHealth Group Incorporated (NYSE:UNH)’s stock had dropped by 2.1% year to date as a cyberattack worried investors that costs would rise. However, the earnings report saw the firm report $6.80 in EPS to beat analyst estimates of $6.66, and consequently, the shares shot up by 11% in the days after.
UnitedHealth Group Incorporated (NYSE:UNH)’s management believes it can grow its customer base. It shared during the Q2 2025 earnings call that:
“We’re also well positioned for growth in 2025. In the selling season to date, the most sophisticated thoughtful buyers of health benefits and services in the US, such as large employers, unions, states, seniors, all continue to choose the offerings of UnitedHealth Group, when they’re looking for managed care, pharmacy services or a Medicare Advantage plan that provides the best value. This consistent growth reflects customers’ recognition of the need for a company like ours. As you know, UnitedHealth Group strives to help reduce the fragmentation and lack of coordination that drives up costs and erodes care outcomes in the $5 trillion US healthcare marketplace. We aim to better coordinate and align incentives among caregivers, payers, and pharmacy, enabling us to focus on the whole patient throughout their health journey.
We believe this increases value for customers and consumers, improves people’s experience and health, reduces redundancies and waste, and ultimately leads to a more sustainable health system. For example, the proven health and economic value to consumers and taxpayers of Medicare Advantage. A recent study by Milliman found that the cost of taxpayers of Medicare Advantage is 4% less than traditional fee-for-service Medicare. At the same time, Medicare Advantage provides seniors well over $2,000 per year in additional value through lower out-of-pocket cost and important services like dental, vision and hearing, none of which fee-for-service Medicare covers. That means a lot to the majority of the people Medicare Advantage serves, who have limited economic resources and otherwise would lack access to such services.”
