Baron Health Care Fund recently published its fourth-quarter commentary – a copy of which can be downloaded here. During the fourth quarter of 2020, the Baron Health Care Fund returned 17.1% (institutional shares). In comparison, the benchmark S&P 500 Index was up 12.15%, while the Russell 3000 Health Care Index was up 10.08%. You should check out Baron’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q4 2020 Investor Letter, Baron Health Care Fund highlighted a few stocks and Humana Inc (NYSE:HUM) is one of them. Humana Inc (NYSE:HUM) is a health and well-being company. In the last three months, Humana Inc (NYSE:HUM) stock lost 8.1% and on February 22nd it had a closing price of $379.89. Here is what Baron Health Care Fund said:
“We added to Humana Inc., the second largest Medicare Advantage player after UnitedHealth Group. As discussed earlier, we believe Medicare Advantage is an attractive market with enrollment growing in the high single digits driven by the aging population and a growing preference among seniors for the enhanced benefits offered by Medicare Advantage providers. With over 70% of its earnings coming from its Medicare Advantage business, Humana is the closest to a pure play Medicare Advantage business among the large managed care companies and should benefit from these secular tailwinds. Humana also has differentiated expertise in managing high-cost, high-risk patients and is well positioned to benefit from the ongoing shift to value-based care, the health care delivery model which rewards hospitals and physicians for better outcomes. We think Humana should be able to meet its long-term financial goal of generating low to mid-teens annual earnings growth over the long term.”
In Q3 2020, the number of bullish hedge fund positions on Humana Inc (NYSE:HUM) stock decreased by about 16% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Humana’s growth potential. Our calculations showed that Humana Inc (NYSE:HUM) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.