RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its “RiverPark Large Growth Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. During the fourth quarter, the markets continued its strong rally with the Russell 1000 Growth Index (RLG) and the S&P 500 index returning 7.1% and 2.4% respectively and RPX returning 5.11%. In 2024, the S&P 500 index and the RLG returned 25.0% and 33.4%, respectively. RPX returned 22.6%. The solid performance of the U.S. stock market in the fourth quarter of 2024 was supported by a rising investor sentiment and solid fundamentals. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, RiverPark Large Growth Fund emphasized stocks such as UnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company that operates through UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx segments. The one-month return of UnitedHealth Group Incorporated (NYSE:UNH) was -7.87%, and its shares gained 0.46% of their value over the last 52 weeks. On March 7, 2025, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $493.48 per share with a market capitalization of $451.392 billion.
RiverPark Large Growth Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH): UNH shares were a top detractor in the fourth quarter after reporting mixed operating metrics for the company’s third quarter and giving disappointing guidance for 2025 ahead of the company’s scheduled analyst day. That investor update was to take place in midtown Manhattan on December 4th but was canceled following the horrific murder of the CEO of the company’s insurance division.
Reported fundamentals for the company’s third quarter included slightly better than expected revenue and EPS but also included a higher Medical Cost Ratio (“MCR” – the ratio of claims paid versus premiums collected). Investors had hoped the company would guide to stabilization heading into 2025 but the company guided 2025 MCR to 86-87% or 150 basis points higher than expected. The rise in MCR has been driven by unfavorable member mix and lower state Medicaid rates relative to current member acuity.
With several at-scale and interconnected businesses, UNH occupies a unique position within the U.S. healthcare system. UnitedHealth has (a) a dominant managed care organization in commercial, Medicare and Medicaid markets, (b) a large and growing presence in local care delivery (OptumHealth’s physicians and ambulatory service centers), (c) one of only three at scale pharmacy benefits managers (OptumRx) and (d) a fast-growing healthcare-information technology, consulting and revenue cycle management business (OptumInsight). The combination of the largest managed care organization (UnitedHealth) with the faster-growing, higher-margin Optum services businesses positions the company to capture a large portion of the future growth opportunities in the U.S. healthcare services industry. We expect balanced growth from both health insurance and health services, leading to consistent high-single-digit revenue growth for the company. With margin expansion from scale, share buybacks from its strong cash generating ability (the company currently has $29 billion in cash), and continued strategic acquisitions, we believe the company can generate mid-teens or better earnings growth for the foreseeable future.”
A senior healthcare professional giving advice to a patient in a clinic.
UnitedHealth Group Incorporated (NYSE:UNH) is in 18th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 150 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the fourth quarter which was 112 in the previous quarter. In 2024, UnitedHealth Group Incorporated (NYSE:UNH) announced revenues exceeding $400 billion, and adjusted earnings per share reached $27.66, which fell within the outlook ranges it established over a year ago. While we acknowledge the potential of UnitedHealth Group Incorporated (NYSE: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 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 UnitedHealth Group Incorporated (NYSE:UNH) and shared the list of best low risk stocks to buy in 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.