In this article, we discuss 5 best large-cap value stocks to buy. If you want to read our detailed analysis of value stocks and their performance, go directly to read 15 Best Large-Cap Value Stocks To Buy.
5. The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 79
P/E Ratio: 12.63
The Cigna Group (NYSE:CI) is an American multinational managed healthcare and insurance company, based in Connecticut. In June, Bank of America upgraded the stock to ‘Buy’ rating with a $320 price target, highlighting the company’s performance. The stock has a price-to-earnings ratio of 12.63, which makes it one of the best value stocks in the large-cap space.
The Cigna Group (NYSE:CI) generated $46.5 billion in revenue in the first quarter of 2023, up by 5.7% from the same period last year. The company’s adjusted income from operations came in at $1.6 billion.
As of the end of March, 79 hedge funds followed by Insider Monkey reported stakes in The Cigna Group (NYSE:CI), up from 76 in the previous quarter. The consolidated value of these stakes is over $3 billion.
Artisan Partners mentioned the performance of The Cigna Group (NYSE:CI) in its Q1 2023 investor letter. Here is what the firm has to say:
“The Cigna Group (NYSE:CI) delivered strong operating results that came in well ahead of the company’s initial guidance, yet the stock has continued to sell off since the beginning of 2023. It seems there are a few reasons for it: 1) concerns over the government targeting pharmacy benefit managers and trying to directly negotiate drug prices under the president’s new budget, 2) a potential normalization of elective procedures that increases medical costs, 3) a rotation by dedicated health care investors toward medical technology and technology areas and away from the safety of big pharma and HMOs, 4) disenrollment trends as it relates to the commercial book of business heading into a potential downturn, and 5) selling in the space as we approach another presidential election in 2024. Pick your poison, but the selling has taken the stock price back to its levels of mid-2022. Our investment case hasn’t changed. Cigna is one of the few managed care organizations in the US with the scale and size to compete effectively. In 2022, free cash flow was $7.4 billion, up $1.3 billion from 2021. Cigna paid down $3.5 billion of debt, repurchased $7.6 billion in stock and sold its life, accident and supplemental benefits business in Asia to Chubb that helped fund the share repurchases. In short, the business in performing well, and management is smartly allocating capital. Additionally, the stock is selling for less than 11X next year’s earnings, which is inexpensive.”
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