Artisan Partners, an investment management company, released its “Artisan Select Equity Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fourth quarter delivered another record-breaking performance for US tech equities. The fund’s Investor Class ARTNX, Advisor Class APDNX, and Institutional Class APHNX returned -1.36%, -1.32%, and -1.33% respectively, in the fourth quarter compared to a 2.41% return for the S&P500 Index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Artisan Select Equity Fund emphasized stocks such as Elevance Health, Inc. (NYSE:ELV). 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 -3.46%, and its shares lost 21.31% of their value over the last 52 weeks. On February 28, 2025, Elevance Health, Inc. (NYSE:ELV) stock closed at $396.88 per share with a market capitalization of $90.231 billion.
Artisan Select Equity Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q4 2024 investor letter:
“Elevance Health, Inc. (NYSE:ELV) took a couple of blows this quarter. First, it warned that its Medicaid earnings would come in below expectations this year. The Medicaid business has been in the spotlight as a result of COVID-19. Medicaid rolls filled up during the pandemic, but then rolls started to come down as enrollees lost eligibility when the economy began to normalize. This has made estimating the severity and health trends of the remaining population difficult. So far this year, cost trends have been much worse than expected and are out of line with Elevance’s approved rate structure. Margins in the Medicaid business, therefore, will be down this year, and overall profits are likely to be flat. We believe this is a temporary situation. State Medicaid programs are legally required to pay actuarially sound rates to the providers of Medicaid services, such as Elevance. Rates are expected, therefore, to moveupwardoverthenext12to18months,restoring Elevance’s margins to a more normal level.
The second issue for Elevance is investor sentiment. A mentally deranged young man murdered top executive of United Healthcare, the largest health insurer in the country. This led to an Internet frenzy of vicious, inaccurate and, frankly, deplorable criticisms of health insurance companies and their executives. Negative and controversial headlines tend to hurt share prices. This was true of Elevance’s stock in the aftermath of this heinous crime. The share price has fallen to extremely attractive levels, trading currently at about 11X earnings. We added to our position during this weakness.”
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, 73 hedge fund portfolios held Elevance Health, Inc. (NYSE:ELV) at the end of the fourth quarter compared to 67 in the third quarter. Elevance Health, Inc. (NYSE:ELV) generated $175.2 billion in total operating revenue in 2024, an increase of approximately 3% from previous year. 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 GreensKeeper Asset Management’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.