Dodge and Cox: “Cigna (CI) Trades at an Attractive Valuation of 9X Forward Earnings”

Dodge & Cox Stock Fund, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. The Dodge & Cox Stock Fund had a total return of –1.3% for the third quarter of 2021, compared to 0.6% for the S&P 500 Index and –0.8% for the Russell 1000 Value Index (R1000V). For the nine months ended September 30, 2021, the Fund had a total return of 24.4%, compared to 15.9% for the S&P 500 and 16.1% for the R1000V You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Dodge & Cox Funds, in its Q3 2021 investor letter, mentioned Cigna Corporation (NYSE: CI) and discussed its stance on the firm. Cigna Corporation is a Bloomfield, Connecticut-based multinational healthcare and insurance company with a $69.7 billion market capitalization. CI delivered an 8.51% return since the beginning of the year, while its 12-month returns are up by 13.61%. The stock closed at $82.79 per share on December 24, 2021.

Here is what Dodge & Cox Funds has to say about Cigna Corporation  in its Q3 2021 investor letter:

“Cigna (2.5% position) is one of the largest and most diversified health care services organizations in the United States. The stock has underperformed recently due to weak financial results, which included higher than expected medical costs. Nevertheless, the company continues to work towards its 10-13% annual earnings growth target, generates significant cash flow, and has plans to deploy capital to shareholders through debt repayments, share buybacks, and a newly announced dividend program. Cigna trades at an attractive valuation of nine times forward earnings.”

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Based on our calculations, Cigna Corporation (NYSE: CI) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. CI was in 58 hedge fund portfolios at the end of the third quarter of 2021, compared to 63 funds in the previous quarter. Cigna Corporation (NYSE: CI) delivered an 11.57% return in the past 3 months.

Earlier this year, we also shared another hedge fund’s views on CI in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

Disclosure: None. This article is originally published at Insider Monkey.