Goldman Sachs’ Top Fund Manager Stock Picks: 25 Best Overweight Stocks

18. Elevance Health, Inc. (NYSE:ELV)

Number of Hedge Fund Holders In Q2 2024: 73

Overweight Percentage: 0.10%

Elevance Health, Inc. (NYSE:ELV) is a diversified American healthcare services provider that provides benefits management and operational services to healthcare facilities. As per the American Medical Association, the company was the second biggest health insurance provider in America in 2023 since it commanded a 12% market share of the commercial market. This provides Elevance Health, Inc. (NYSE:ELV) with a wide moat, key margin advantages, economies of scale, and a sizeable customer base of 47.5 million members. However, the reliance on the healthcare insurance industry also means that Elevance Health, Inc. (NYSE:ELV) remains vulnerable to government regulations on the sector that can limit the fees that insurance providers charge. This has been evident in the stock as well, as Elevance Health, Inc. (NYSE:ELV)’s shares closed 8% lower in 2023 because of a drop in the number of Medicaid memberships in the US following a bump during the coronavirus pandemic. To help diversify its business, the healthcare firm is currently working with a private equity firm to grow its share in the primary care market. If successful, the deal could help create tailwinds for the stock.

Artisan Partners mentioned Elevance Health, Inc. (NYSE:ELV)’s care delivery business Carelon in its Q2 2024 investor letter. Here is what the fund said:

“Elevance shares rose 5% during the quarter. The business has been performing well and has delivered good profit growth this year, despite a flat top line. It has largely navigated the challenges related to Medicaid redeterminations, which have caused temporary volatility in membership and health care utilization levels. Its vertical integration strategy is gaining traction, with strong revenue and profit growth at its Carelon Services business. Elevance’s shares are trading at 13X earnings, which is a very attractive investment proposition for a durable business that expects long-term earnings growth of over 12%.”