The Inflation Reduction Act 2022: Top 5 Winners

3. Cigna Corporation (NYSE:CI)

Number of Hedge Fund Holders: 63

Cigna Corporation (NYSE:CI) provides insurance products and services in the United States. The company offers pharmacy benefits management, health insurance plans, care delivery and management, and intelligence solutions to employers, government organizations, and healthcare providers. The stock has gained about 24% year-to-date and as insurers will get huge funding from the Inflation Reduction Act, Cigna Corporation (NYSE:CI) stands to be one of the biggest winners. The company posted above-consensus EPS and revenue in Q2 2022, and its total customer relationships have grown by 3% year-to-date to 191.3 million. Cigna Corporation (NYSE:CI) also raised its FY2022 outlook. 

On July 27, Cigna Corporation (NYSE:CI) declared a $1.12 per share quarterly dividend, in line with previous. The dividend is distributable on September 22, to shareholders of the company as of September 7. The company’s stock delivers a dividend yield of 1.55% as of August 12. 

UBS analyst Kevin Caliendo raised the price target on Cigna Corporation (NYSE:CI) to $330 from $310 on August 8 and reaffirmed a ‘Buy’ rating on the shares. The stock has outperformed its competitors since the posting of Cigna’s strong Q2 earnings and its lower medical loss ratio forecast for 2022, the analyst told investors. If Covid-19 and flu cases remain insignificant in the second half of the year, the analyst sees “upside to 2022 estimates”.

According to Insider Monkey’s data, 63 hedge funds were long Cigna Corporation (NYSE:CI) at the conclusion of the first quarter of 2022, up from 53 funds in the prior quarter. Larry Robbins’ Glenview Capital is the largest stakeholder of the company, with roughly 1.6 million shares worth $382.4 million. 

Here is what the Davis Opportunity Fund had to say about Cigna Corporation (NYSE:CI) in its Q4 2021 investor letter:

“Healthcare is included in the portfolio both for company-specific reasons, as well as big picture trends. At the company level, we hold select companies in pharmaceuticals, healthcare services and health insurance at attractive valuations. This is at a time when the average age of the U.S. population is fast approaching 40, older than Asia-Pacific and a little younger than the aged populations of Europe and Japan. The number of seniors in the U.S.—i.e., 65 years or older— now surpasses 54 million, or about 15% of the population. Seniors, on average, take a much greater number of medications and account for a large and disproportionate share of healthcare spending, and we expect that trend to continue due to both raw demographics and a proliferation in the number of available treatments and services available now, the latter being driven by innovation and investment in the healthcare industry. Representative holdings in the Fund include Cigna, UnitedHealth Group, Viatris and Quest Diagnostics.”