Top 5 Health Insurance Stocks to Buy

2. Humana Inc. (NYSE:HUM)

Number of Hedge Fund Holders: 69 

Humana Inc. (NYSE:HUM) operates as a health and well-being company in the United States. It is one of the major insurance stocks to invest in. On October 12, Humana and USAA, a health insurer, co-branded Rx Plan, a medicare advantage plan which will provide flexibility to users to see in network local doctors and fill prescriptions at pharmacies close to their homes. It is the only Medicare advantage plan developed in partnership with USAA.

On September 20, RBC Capital analyst Frank Morgan maintained an Outperform rating on Humana Inc. (NYSE:HUM) stock and raised the price target to $544 from $541, noting that the company’s strong long-term earnings targets had led to growth in core Medicare Advantage and value-based care initiatives. 

In its Q3 2022 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Humana Inc. (NYSE:HUM) was one of them. Here is what the fund said:

“A top contributor to performance for the one-year period was Humana Inc. (NYSE:HUM) (U.S.), a leader and near pure play in the fastest growing sector of managed care, Medicare Advantage. In its first-quarter earnings report, the company generally beat consensus estimates and raised guidance. Encouragingly, the issues that had caused this year’s Medicare Advantage enrollment shortfall seem to have stabilized, and during the most recent open enrolment period, member retention appears in line or even slightly better than expectations. In addition, Humana reaffirmed its full-year guidance for $24.50 adjusted earnings per common share. The company’s second-quarter earnings results also beat consensus expectations due to lower than expected medical expenses, which stemmed from a decline in Covid-19-related medical costs that was not fully offset by all other medical costs returning to normal levels. Management also indicated that the company is tracking well against achieving its $1 billion cost-savings plan by the end of 2023, and it intends to reinvest the majority of those savings into improved member benefits. Ultimately, Humana’s share price reached our sell target, and we opted to eliminate the position.”