6. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders as of Q4: 150
Marshall Wace LLP’s Equity Stake: $988.57 Million
Specializing in health insurance and health care services, UnitedHealth Group Incorporated (NYSE:UNH) reported fourth-quarter 2024 revenue of $100.81 billion, slightly below analyst expectations of $101.76 billion. The company experienced a rise in its medical cost ratio to 85.5%, exceeding the projected 84.96%, driven by increased utilization of healthcare services under Medicare plans. Despite this, UnitedHealth’s Optum healthcare services division showed strong performance, growing 9% to $65.1 billion. Additionally, the company posted earnings per share of $6.81, surpassing estimates. UnitedHealth Group Incorporated (NYSE:UNH) reaffirmed its 2025 profit outlook, projecting full-year revenue between $450 billion and $455 billion, demonstrating confidence in its long-term strategy.
The stock has faced challenges, declining 25.7% from its November 2024 peak of $630.73, significantly underperforming the broader healthcare sector. Over the last three months, shares have dropped nearly 23%, remaining below key technical benchmarks such as the 50-day and 200-day moving averages. However, analysts maintain a positive outlook, assigning the stock a “Strong Buy” rating and setting an average price target of $639.21, which implies a potential 36.4% upside. While UnitedHealth Group Incorporated (NYSE:UNH) has encountered short-term setbacks, its continued expansion in Optum and strong full-year revenue guidance reinforce its long-term growth prospects, making it an attractive investment at its current valuation.
UnitedHealth Group Incorporated (NYSE:UNH)’s revenue growth has been fueled by the rapid expansion of its OptumHealth division, which provides healthcare services through affiliated medical groups. From 2022 to 2024, OptumHealth’s revenue soared by 48%, outpacing the company’s overall revenue growth of 23%, driven by a greater number of patients under value-based care models, including at-home services. Additionally, UnitedHealth’s insurance business saw over 20% growth in both its Medicaid and Medicare segments, supported by an increase in customer enrollments.
UnitedHealth Group Incorporated (NYSE:UNH)’s strong market position, expanding OptumHealth division, and consistent revenue growth make it one of the top stocks to buy. Despite short-term challenges, its solid fundamentals, strategic investments, and analyst-backed upside potential position it as a compelling long-term investment.
Polen Focus Growth Strategy stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:
“We trimmed our positions in UnitedHealth Group Incorporated (NYSE:UNH), Amazon, ServiceNow, and Gartner during the quarter. We trimmed our position in UnitedHealth to fund the purchase of CoStar Group. Despite short-term margin headwinds, our long-term expectations for UnitedHealth Group remain virtually unchanged, with the trim simply reflecting what we view as a superior investment alternative.”
