5 Best Health Insurance Stocks to Buy

4. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders: 66

CVS Health Corporation (NYSE:CVS) is a healthcare enterprise headquartered in the United States, overseeing an extensive network of retail pharmacies and clinics throughout the country. The corporation manages various brands, including CVS Pharmacy, a retail pharmacy chain; CVS Caremark, a pharmacy benefits manager, and Aetna, a health insurance provider.

In a recent disclosure, CVS Health Corporation (NYSE:CVS) unveiled its Q2 outcomes, highlighting an adjusted EPS of $2.21 for the quarter, surpassing projections by $0.09. Additionally, the revenue for the period surged by a notable 10.3% compared to the prior year, amounting to $88.92 billion, exceeding estimates by $2.39 billion. The company currently offers a dividend of $0.60, boasting a yield of 3.37% as of October 16.

At the conclusion of the second quarter in 2023, Insider Monkey’s database, which tracks 943 hedge funds, reported that 66 hedge funds held stakes in CVS Health Corporation (NYSE:CVS). The primary stakeholder was John Overdeck and David Siegel’s Two Sigma Advisors, possessing a significant stake in the company valued at $398.9 million.

Coho Partners Relative Value Equity Fund made the following comment about CVS Health Corporation (NYSE:CVS) in its second quarter 2023 investor letter:

“In December of 2017, CVS Health Corporation (NYSE:CVS) agreed to buy Aetna, which broadened its offering by entering the managed care business. CVS has been moving its portfolio to a more value-based outcome model, and Aetna was a major move in that direction. We were willing to accept the leverage that came with the deal because CVS has a very cash generative model, and we anticipated the free cash flow would enable the company to de-lever fairly quickly.

By mid-2022, CVS was in a position to use the free cash flow that had been going to debt repayment to do bolt-on deals to further prepare for the value-based outcome model and/or return more cash to shareholders in the form of higher dividends or share repurchases. However, CVS lost a “star” in its largest Medicare plan in late 2022 and this will adversely impact earnings in 2024. This was a surprise and disappointment to us, but management should be able to regain the “star” in the back half of 2023, which will then give the company a nice tailwind in 2025…” (Click here to read the full text)