5 Most Undervalued Healthcare Stocks To Buy According To Hedge Funds

4. HCA Healthcare, Inc. (NYSE:HCA)

Number of Hedge Fund Holders: 64

Healthcare facilities operator HCA Healthcare, Inc. (NYSE:HCA) ranks 4th in our list of the most undervalued healthcare stocks to buy according to hedge funds. In January, HCA Healthcare, Inc. (NYSE:HCA) posted mixed Q4 results. GAAP EPS in the quarter came in at $7.28, easily beating estimates by $2.48. Revenue in the period jumped about 2.9% on a YoY basis to reach $15.5 billion but missed estimates by $130 million.

Adjusted EBITDA in the quarter totaled $3.179 billion. Cash flows from operating activities came in at $2.527 billion. For 2023, HCA Healthcare, Inc. (NYSE:HCA) expects its revenue to come in between $61.5 billion to $63.5 billion versus the consensus estimate of $62.80 billion.

Diamond Hill Large Cap Strategy made the following comment about HCA Healthcare, Inc. (NYSE:HCA) in its Q4 2022 investor letter:

“HCA Healthcare, Inc. (NYSE:HCA)’s stock price continued to advance in Q4 following a difficult first half of 2022. Fortunately, we did not own shares until the end of Q2. Two major factors that are top of mind for investors right now are volumes and labor constraints, both of which continue to normalize albeit at a relatively slow pace. We remain favorable on the longterm fundamentals of the business and the opportunity for HCA to reinvest the large amounts of cash it generates at attractive returns. That said, the discount to our intrinsic value estimate has narrowed significantly following robust returns in the second half of the year.”