Oakmark Funds, advised by Harris Associates, released its “Oakmark Equity and Income Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund delivered -0.20% during the quarter compared to the Lipper Balanced Fund Index’s -1.24% return. The equity portfolio returned 1.28% in the quarter, compared to 2.41% for the S&P 500 Index. The fixed-income portfolio returned -2.25% compared to -3.06% for the Bloomberg U.S. Aggregate Bond Index. The fund has allocated 59.3% in equities, 39.5% in fixed income, and 1.2% in cash. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Oakmark Equity and Income Fund highlighted stocks like Elevance Health, Inc. (NYSE:ELV) in the fourth quarter 2024 investor letter. 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 7.34%, and its shares lost 17.42% of their value over the last 52 weeks. On January 14, 2025, Elevance Health, Inc. (NYSE:ELV) stock closed at $393.16 per share with a market capitalization of $91.183 billion.
Oakmark Equity and Income Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q4 2024 investor letter:
“Elevance Health, Inc. (NYSE:ELV) is one of the nation’s largest managed care organizations. We believe managed care is an attractive industry, as health expenditures have historically outpaced GDP, and the short business cycle allows companies to quickly correct underwriting mistakes. More recently, managed care stocks have underperformed the market as the industry is facing headwinds due to mismatches between reimbursement rates and medical costs. We believe this will prove transitory and that changes to pricing and/or plan designs will help realign profit trends over time. While we acknowledge that a return to “normal” profitability will take a few years, we believe the stock is trading at a depressed multiple of depressed earnings and for a significant discount to both the broader market and the companies’ own trading history. With its unmatched scale, diversification across end markets, and track record of disciplined underwriting and capital allocation, we believe that over time, the market will once again recognize Elevance as a high-quality franchise with above-average growth characteristics.”
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Elevance Health, Inc. (NYSE:ELV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held Elevance Health, Inc. (NYSE:ELV) at the end of the third quarter which was 73 in the previous quarter. 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 the list of cheap healthcare stocks to buy heading into 2025. 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.