We recently published a list of 10 Best Stocks to Buy Now For the Long Term. In this article, we are going to take a look at where UnitedHealth Group Incorporated (NYSE:UNH) stands against other best stocks to buy now for the long term.
What’s Next for the Equity Markets?
The US equity markets have started to show signs of recovery after weeks of volatility due to the tariff situation. On March 21, J.P Morgan Management’s Global Investment Strategist, Alan Wyne released his market update noting that this was the first weekly gain after four weeks for the US equity markets. While highlighting the current market condition Wyne highlighted that this improvement follows the Federal Reserve’s decision to leave interest rates unchanged while revising growth forecasts downward and increasing near-term inflation expectations. The Fed has emphasized that tariff-related inflation is likely transitory. Futures markets anticipate two interest rate cuts this year, with a 50% chance of a third, sparking demand in Treasury markets. On the other hand, yields on the 2-year and 10-year Treasury notes dropped by 7 and 9 basis points, respectively. Moreover, European stocks have continued to outperform, supported by Germany’s new legislation exempting defense spending exceeding 1% of GDP from borrowing restrictions. Wyne suggests that this policy could unlock significant fiscal spending across the Eurozone. The Stoxx 50 index is up 0.2% for the week and has gained 11% year-to-date.
While the S&P 500 is hovering near correction territory, marking five years since its COVID-19 drawdown. Wyne noted that the risks appear evenly distributed between bullish and bearish outlooks. On one hand, the bears argue that softer economic data and rising consumer inflation expectations could worsen with tariff escalations, potentially leading to stagflation. On the other hand, bulls counter that weak sentiment data does not necessarily reflect hard economic indicators such as employment and retail sales, which remain robust. Wyne highlighted that bulls point out that long-term inflation expectations are still anchored near the Fed’s target, mitigating risks of a wage spiral. He pointed out that historically speaking, investing during sentiment troughs has yielded strong returns in subsequent months.
Lastly, closing his market outlook with some investment advice, Wyne suggests that balancing risks by maintaining strategic asset allocation might be a viable strategy. He added that investors should use equities for long-term capital appreciation and fixed income for hedging during slowdowns. In addition, tactical adjustments can help capitalize on emerging opportunities while adding resilience through assets like gold and infrastructure investments. Wyne stressed that despite market volatility since the COVID-19 drawdown, the S&P 500 has risen over 150%, which underscores the importance of staying invested through uncertainties.
Our Methodology
To curate the list of the 10 best stocks to buy now for the long term we reviewed financial media reports and blue chip ETFs. From these sources, we picked stocks from multiple sectors including financials, energy, technology, consumer staples, and more. We finally selected stocks with a history of stable operations. Additionally, we checked their 10-year revenue growth rates and only considered companies with a growth rate of at least 7%. The list is ranked in ascending order of the number of hedge funds holding each stock, sourced from Insider Monkey’s Q4 2024 database.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A senior healthcare professional giving advice to a patient in a clinic.
UnitedHealth Group Incorporated (NYSE:UNH)
10-Year Sales Growth: 11.86%
Number of Hedge Fund Holders: 150
UnitedHealth Group Incorporated (NYSE:UNH) is a leading American multinational healthcare company that operates through UnitedHealthcare and Optum segments. The company provides a variety of healthcare services, including data analytics, pharmacy service, and population health management, along with health insurance and benefits to different groups.
In fiscal 2024, UnitedHealth Group Incorporated (NYSE:UNH) reported an 8% year-over-year increase in revenue, reaching a total of $400.3 billion. This growth was driven by comprehensive services across both its business segments, Optum and UnitedHealthcare. Management noted that the number of domestic consumers served by UnitedHealthcare increased by 2.1 million, reflecting the company’s efforts to expand its health benefits offerings and enhance consumer choice. Moreover, the Optum segment also saw a significant increase in value-based care patients, with 600,000 individuals served.
The improved quarterly performance led to a bullish sentiment around the stock. On March 5, J.P. Morgan analyst Lisa Gill maintained a Buy rating on the stock. The company has grown its sales by more than 12% during the last 10 years and is one of the best stocks to buy now for long term.
Parnassus Growth Equity Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:
“We sold two Health Care positions during the quarter, pharmaceutical company AstraZeneca and insurerUnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth’s business model is becoming higher-risk, which coupled with slowing Medicare Advantage growth and regulatory uncertainty led to us exiting the position.
After the UnitedHealth stock price recovered to its historical multiple in early November, we felt it was an opportune time to sell based on our concerns about slowing Medicare Advantage growth and the company’s growing business complexity and risk.”
Overall, UNH ranks 5th on our list of best stocks to buy now for the long term. While we acknowledge the potential of 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 time frame. If you are looking for an AI stock that is more promising than UNH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
