5 Best Health Insurance Stocks to Buy

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

Number of Hedge Fund Shareholders: 81

Hedge funds have also been pouring into long positions in Elevance Health, Inc. (NYSE:ELV) in recent quarters, with the stock also very close to an all-time high in smart money ownership. Andreas Halvorsen’s Viking Global has the largest stake in ELV among the select group of funds tracked by Insider Monkey’s hedge fund database, owning over 2.15 million shares worth nearly $1 billion.

Elevance Health, Inc. (NYSE:ELV), formerly Anthem, is one of the biggest players in the health insurance industry, boasting 47.5 million members at the end of 2022, a 5% year-over-year increase. Despite that customer growth, the company’s GAAP net income of $6.03 billion was down slightly from the prior year, though analysts are predicting a big push on that front in 2023, predicting GAAP net income per share to rise by as much as 35%.

The Baron Health Care Fund is bullish on Elevance Health, Inc. (NYSE:ELV)’s growth opportunity, as it revealed in its Q1 2023 investor letter:

“Elevance Health, Inc. (NYSE:ELV) is a leading health benefits company in the U.S., serving more than 45 million members through its affiliated health plans under the Blue Cross/Blue Shield brand in 14 states. Shares fell along with those of other managed care companies on investor concerns over proposed lower 2024 Medicare Advantage (MA) rates and changes in risk assessment methodology. We believe Elevance has multiple growth drivers, including its MA business, its in-house pharmacy benefit management business, and its Diversified Business Group, which includes behavioral health, advanced analytics, and complex and chronic care services. Near term, medical cost trends remain low, Elevance has pricing power, and earnings should benefit from rising interest rates. Over the long term, management targets 12% to 15% annual EPS growth. We think Elevance is a high-quality growth company trading at a reasonable valuation.”