Is Cigna (CI) a Smart Long-term Buy?

Avenir Capital recently released its Q3 2020 Investor Letter, a copy of which you can download here. The Avenir Global Fund (the “Fund”) increased 8.7% for the September 2020 quarter bringing the past 1-year return to –3.9% (net). The MSCI ACWI index (AUD) returned 3.9% for the quarter and the same for past year. You should check out Avenir Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Avenir Capital highlighted a few stocks and Cigna Corp (NYSE:CI) is one of them. Cigna Corp (NYSE:CI) is an insurance company. Year-to-date, Cigna Corp (NYSE:CI) stock gained 5% and on November 17th it had a closing price of $214.81. Here is what Avenir Capital said:

“The only material detractor for the quarter was Cigna, a U.S. healthcare stock, which declined 9.7% as the U.S. moved closer to the election and Joe Biden’s chances of winning the presidency increased, along with the possibility of the Democrats gaining control of the senate. Investors sold U.S. healthcare stocks due to increased fears of unfavourable policy change and following a well-established pattern of healthcare stocks underperforming leading up to an election and then materially outperforming after the election. While we generally don’t comment on current quarter events in these letters, given the timing and significance of the U.S. election, it is, perhaps, worth pointing out that Cigna’s share price jumped 15% the day after the election. We think the probability of dramatically unfavourable policy outcomes is low and prefer to hold this proven compounder through the volatility.”

Earlier this month, we published an article revealing that Cigna Corp (NYSE:CI) is one of the top 5 leading healthcare stocks surging on pent-up demand.

In Q2 2020, the number of bullish hedge fund positions on Cigna Corp (NYSE:CI) stock decreased by about 3% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Cigna’s growth potential. Our calculations showed that Cigna Corp (NYSE:CI) isn’t ranked among the 30 most popular stocks among hedge funds.

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Video: Top 5 Stocks Among Hedge Funds

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