We recently published a list of the 10 Best Stock Picks of Billionaire Leon Cooperman in 2024. Since The Cigna Group (NYSE:CI) ranks 6th on the list, it deserves a deeper look.
Billionaire Leon Cooperman predicted in April that the US is headed for a financial crisis. Cooperman said that the Federal Reserve kept interest rates near zero, but raised them dramatically in a period of 12 months. The Omega Family Office chairman and CEO expects “one or two” rate cuts this year. He emphasized that the market remains overvalued.
In February last year, the billionaire said that the market was headed for a recession, and noted that the S&P 500 high of about 4,800 recorded in 2022 could “stand for some time.” In July 2022, while talking to Bloomberg, Cooperman said that he was “shocked” that interest rates were so low.
“I am of the view that equities are the best house in the financial asset in the neighborhood, but I don’t like the neighborhood, for a lot of reasons.”
Cooperman in the Bloomberg interview in 2022 had categorically said that sooner or later the strong dollar, prices of oil and the Fed would “lead us into a recession.” He went on to add that recession would be a “2023 event” and predicted that the market would bottom somewhere near 35% to 45% below its peak of 4800.
The billionaire had said that he would be “very surprised” if we were to see another bull market anytime soon, given his view that we’ve had one of the biggest bull runs driven by FAANG, SPACs and speculation. The AI revolution that started in 2023 was indeed a shocker for Cooperman as his recession predictions were proven wrong.
For this article we scanned billionaire Leon Cooperman’s Q1 portfolio and picked 10 stocks with the highest number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 76
Leon Cooperman owns a $98 million stake in insurance company The Cigna Group (NYSE:CI) as of the end of the first quarter of 2024. It is one of the best stock picks of Leon Cooperman in 2024 based on hedge fund sentiment, as 75 hedge funds in addition to Cooperman reported having stakes in The Cigna Group (NYSE:CI).
According to data from Yahoo Finance, Cigna Group’s (NYSE:CI) estimated EPS for 2025 is $32.08. Assuming the insurance sector’s P/E ratio is 19 and using Cigna Group’s (NYSE:CI) current stock price of around $330, the stock is looks undervalued. This assumption is also backed by data compiled by Yahoo Finance, which says the average analyst price target set by the Wall Street for Cigna Group (NYSE:CI) is $391. Cigna Group (NYSE:CI) is a giant in the insurance industry, with 200 million total customer relationships. Over the past 20 years, Cigna Group (NYSE:CI) managed to grow its earnings in 18 years. Wall Street estimates expect Cigna Group (NYSE:CI) to grow 11.97% per annum over the next five years, while its growth this year is expected to hit 13.7%. The stock’s forward P/E ratio is 12.11, much lower than the sector median multiple of 19.70.
Overall, The Cigna Group (NYSE:CI) ranks 6th on Insider Monkey’s list titled 10 Best Stock Picks of Billionaire Leon Cooperman in 2024. While we acknowledge the potential of The Cigna Group (NYSE:CI), 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 more promising than The Cigna Group (NYSE:CI) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.