12. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders In Q2 2024: 114
Overweight Percentage: 0.12%
UnitedHealth Group Incorporated (NYSE:UNH) is the biggest health insurance company in America. Estimates show that it has a customer base of 50 million people, which provides it with a wide moat in the rapidly changing pharmaceutical and biotechnology markets. Courtesy of weight loss drugs and other breakthrough treatments for ailments such as Sickle Cell disease, UnitedHealth Group Incorporated (NYSE:UNH) carries the chance to use its large user base to tap into the market demand for its users. Yet, its size, as evidenced by $381 billion in trailing twelve month revenue also means that the firm needs to control costs tightly. Cost control has driven UnitedHealth Group Incorporated (NYSE:UNH)’s narrative in the first half of 2024 after a historic cyberattack on its Change Healthcare business disrupted claims processing all over the US. For investors, this meant that the benefits provider would have to incur costs to manage the impacts, and before UnitedHealth Group Incorporated (NYSE:UNH)’s second quarter earnings, the stock was down 2.1% year to date. However, the earnings report saw the firm’s $6.80 EPS beat analyst estimates of $6.66, and UnitedHealth Group Incorporated (NYSE:UNH)’s shares shot up by 11% over the next couple of days.
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.”
