PGIM Jennison Health Sciences Fund recently released its third quarter 2024 investor letter. A copy of the letter can be downloaded here. Given concerns regarding the decreasing pace of U.S. employment and the associated concerns that U.S. interest rates may have been maintained at levels higher than necessary to moderate the pace of inflation, U.S. equity markets fluctuated during the summer and partially reversed their year-to-date gains. The S&P 1500 Health Care Index appreciated 6.1% in the third quarter, outperforming the S&P 500, which gained 5.9%. While the fund advanced in the quarter, it underperformed the index. Stock selection within medtech and pharmaceuticals contributed to the most value. Relative performance was negatively impacted by security selection in biotechnology and health care providers and services, as well as underweights in life sciences tools and services. In addition, please check the fund’s top five holdings to know its best picks in 2024.
PGIM Jennison Health Sciences Fund highlighted stocks like UnitedHealth Group Incorporated (NYSE:UNH) in the third 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 -10.05%, and its shares lost 0.13% of their value over the last 52 weeks. On December 11, 2024, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $533.53 per share with a market capitalization of $490.999 billion.
PGIM Jennison Health Sciences Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) is the largest health care services company in the U.S. The company offers healthcare benefits to Americans who receive insurance from employers or government-based programs such as Medicare and Medicaid. Half of the company is represented from non-benefits businesses under the Optum umbrella. This includes a technology business that helps hospitals, pharma companies, and other payors. It also includes a fast-growing provider business where Optum owns surgery centers and urgent care centers. The company’s primary care business continues to grow and it’s participating in the emerging trend of primary care taking on risk and acting like an insurance company. Finally, UnitedHealth owns a drug benefits manager. The company continues to have high quality and well-positioned businesses. In the first half of ’24, UnitedHealth has beat earnings expectations and confirmed full year financial guidance. While medical costs have pressured results, the company has cut a lot of spending to support earnings. We have also seen volatility in the stock related to political dynamics; a view that Republicans are better for this group helped support the stock in June and July and a moderation in policy views from the democratic nominee also helped support the stock. Future catalysts for the company and the stock include potentially stabilizing cost trend, a calmer political environment, and visibility into the company’s long-term earnings growth targets.”
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, 112 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the third quarter which was 114 in the previous quarter. UnitedHealth Group Incorporated’s (NYSE:UNH) Q3 revenues reached $101 billion, marking a 9% year-over-year increase with strong growth at both Optum and UnitedHealthcare segments. 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 safe stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q3 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.