10 Best Stocks to Buy According to D1 Capital’s Daniel Sundheim

5. Elevance Health, Inc. (NYSE:ELV)

D1 Capital Partners’s Stake as of Q4: $294.7 million

Number of Hedge Fund Holders: 73

Elevance Health Inc. (NYSE:ELV), formerly Anthem, Inc., is a vital health-benefits provider in the United States. Anthem Blue Cross, Blue Shield, Wellpoint, and Carelon are some of the brands under which the company offers medical, pharmaceutical, dental, long-term care, disability, and behavioral health insurance.

On April 24, Cantor Fitzgerald reiterated its solid outlook on Elevance Health Inc. (NYSE:ELV), keeping an Overweight rating and a $485 price target. Sarah James, the firm’s analyst, stated that Elevance’s performance is beginning to be evaluated more positively than that of its sector peers, especially after finishing a clean financial quarter. According to James, if these trends continue, Elevance holds the potential to surpass its financial guidance slightly.

Elevance Health’s first-quarter financial results for 2025 surpassed Wall Street forecasts, with adjusted earnings per share of $11.97 compared to an estimate of $11.08. The company’s revenue totaled $48.9 billion, 5% higher than expected. Notably, Elevance’s Carelon division saw impressive growth, with revenues jumping to $16.7 billion, representing a year-over-year rise of 37.9%.

Artisan Select Equity Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q4 2024 investor letter:

“Elevance Health, Inc. (NYSE:ELV) took a couple of blows this quarter. First, it warned that its Medicaid earnings would come in below expectations this year. The Medicaid business has been in the spotlight as a result of COVID-19. Medicaid rolls filled up during the pandemic, but then rolls started to come down as enrollees lost eligibility when the economy began to normalize. This has made estimating the severity and health trends of the remaining population difficult. So far this year, cost trends have been much worse than expected and are out of line with Elevance’s approved rate structure. Margins in the Medicaid business, therefore, will be down this year, and overall profits are likely to be flat. We believe this is a temporary situation. State Medicaid programs are legally required to pay actuarially sound rates to the providers of Medicaid services, such as Elevance. Rates are expected, therefore, to moveupwardoverthenext12to18months,restoring Elevance’s margins to a more normal level.

The second issue for Elevance is investor sentiment. A mentally deranged young man murdered top executive  of United Healthcare, the largest health insurer in the country. This led to an Internet frenzy of vicious, inaccurate and, frankly, deplorable criticisms of health insurance companies and their executives. Negative and controversial headlines tend to hurt share prices. This was true of Elevance’s stock in the aftermath of this heinous crime. The share price has fallen to extremely attractive levels, trading currently at about 11X earnings. We added to our position during this weakness.”