Heartland Advisors, an investment management company, released its first-quarter 2026 investor letter for the “Heartland Opportunistic Value Equity Strategy”. A copy of the letter can be downloaded here. Improving market breadth was noted in the first quarter, but geopolitical instability in the Middle East disrupted this trend. Instead of speculating on the conflict’s duration or crude oil prices, we focus on bottom-up fundamental analysis. The market also favored AI winners with high valuations and penalized losers. Against this backdrop, the strategy appreciated 3.66%, outperforming the Russell 3000 Value Index, which rose 2.23%. Stock selection was positive across most sectors. In addition, you can check the Fund’s top 5 holdings to determine its best picks for 2026.
In its first-quarter 2026 investor letter, Heartland Opportunistic Value Equity Strategy highlighted stocks such as Elevance Health, Inc. (NYSE:ELV). Elevance Health, Inc. (NYSE:ELV) is a health benefits company that detracted from the Strategy’s performance in the quarter. On June 26, 2026, Elevance Health, Inc. (NYSE:ELV) closed at $395.18 per share, reflecting a market capitalization of $85.81 billion. Elevance Health, Inc. (NYSE:ELV) posted a one-month return of -1.86%, while its shares gained 1.60% over the past 52 weeks.
Heartland Opportunistic Value Equity Strategy stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q1 2026 investor letter:
“One of the biggest detractors to our performance in the first quarter was Elevance Health, Inc. (NYSE:ELV), a large, diversified managed care insurer across commercial, individual and government lines with integrated healthcare services as well. Elevance operates under the Blue Cross Blue Shield brand in several states.
The entire health insurance industry has been through a brutal period marked by a combination of elevated healthcare utilization and medical cost inflation, along with policy-related disruptions to its enrollment mix in Medicaid and ACA exchanges. The result has been significant margin and earnings headwinds for all industry players, but with smaller competitors in particular suffering significant financial pressures. Elevance, one of the largest health insurers in the nation, is likely to emerge from this period with more market share and embedded earnings power.
In the meantime, management is buying back stock and can navigate this period from a position of strength. Yet based on estimated earnings over the next 12 months, the stock is trading at a 30% discount to the Russell 3000® Value Index, even though ELV has traded on par with the benchmark in prior cycles. Last year, we harvested losses in a smaller industry player to upgrade into Elevance given the company’s stronger balance sheet and advantaged scale.”
Elevance Health, Inc. (NYSE:ELV) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 87 hedge fund portfolios held Elevance Health, Inc. (NYSE:ELV) at the end of the first quarter, up from 78 in the previous quarter. While we acknowledge the risk and potential of Elevance Health, Inc. (NYSE:ELV) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Elevance Health, Inc. (NYSE:ELV) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Elevance Health, Inc. (NYSE:ELV) and shared the list of best undervalued stocks to buy according to the financial media. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
