We recently published a list of Top 10 Stocks to Buy According to Marshall Wace LLP. In this article, we are going to take a look at where UnitedHealth Group Incorporated (NYSE:UNH) stands against other top stocks to buy according to Marshall Wace LLP.
Marshall Wace LLP is a prominent British hedge fund established in 1997 by Paul Marshall and Ian Wace. Headquartered in London, the firm has grown to become one of the world’s leading hedge funds. The firm operates as a unified global team, dedicated to fostering long-term client relationships built on trust and integrity, with a culture centered on continuous innovation and improvement.
Sir Paul Roderick Clucas Marshall, known simply as Paul Marshall, serves as the chairman and chief investment officer of Marshall Wace. Born in London, England, he studied history and modern languages at St John’s College, Oxford before earning an MBA from INSEAD Business School in Fontainebleau, France. Prior to co-founding Marshall Wace, Marshall was the Head of European Equities at Mercury Asset Management.
Beyond finance, Marshall is best known as a philanthropist and media baron. He expanded his influence into media by owning UnHerd and The Spectator and co-owning GB News. His philanthropic efforts are equally notable; he was named the top donor on The Sunday Times Giving List in 2024 after donating a hefty sum to various causes including the London School of Economics to establish the Marshall Institute. He was knighted in the 2016 Birthday Honours for his contributions to education and philanthropy.
Politically, Marshall was initially a member and donor of the Liberal Democrats, co-editing the influential Orange Book in 2004 alongside key party figures. However, his stance shifted in 2015 when he left the party due to his support for Brexit. He later became a major donor to the Brexit campaign and the Conservative Party. His ownership of UnHerd and GB News has positioned him as a significant right-wing media figure in the UK.
Ian Gerald Patrick Wace serves as the firm’s chief executive officer and chief risk officer. Despite not holding a college degree, he has achieved exceptional success in the finance industry, earning recognition as “perhaps the only person without a college degree to ever qualify” for Institutional Investor’s Rich List. Wace began his career at S.G. Warburg & Co., where he spent 11 years and became the firm’s youngest director at the age of 25. His rapid ascent continued as he was appointed head of European equity sales in 1988, head of proprietary trading in 1993, and head of international trading in 1994. In 1995, he joined Deutsche Morgan Grenfell as head of equity and derivative trading, further establishing his expertise in the financial sector before co-founding Marshall Wace in 1997.
Marshall Wace LLP manages quantitative, systematic, and fundamental investment strategies, with a primary focus on long/short equity. These strategies are implemented on a global scale, utilizing proprietary systems and processes to optimize performance. For over two decades, technology and data have been central to the firm’s operations. In 2002, Marshall Wace introduced MW TOPS, its Trade Optimized Portfolio System and the world’s first ‘Alpha Capture’ application. This revolutionized the way investment insights were harnessed and contributed largely to its prominence in the hedge fund industry. Today, the firm remains committed to innovation and excellence, continuously refining its methodologies to maintain a competitive edge in the financial markets. Despite its success, Marshall Wace has faced recent challenges; in the fiscal year ending February 2024, the firm’s revenues declined substantially, leading to a nearly 64% drop in profits.
Marshall Wace LLP’s Q4 2024 13F filing reported over $83 billion in managed 13F securities, with its top 10 holdings accounting for 34.5% of the total portfolio.
Our Methodology
The stocks discussed below were picked from Marshall Wace LLP’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A senior healthcare professional giving advice to a patient in a clinic.
UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders as of Q4: 150
Marshall Wace LLP’s Equity Stake: $988.57 Million
Specializing in health insurance and health care services, UnitedHealth Group Incorporated (NYSE:UNH) reported fourth-quarter 2024 revenue of $100.81 billion, slightly below analyst expectations of $101.76 billion. The company experienced a rise in its medical cost ratio to 85.5%, exceeding the projected 84.96%, driven by increased utilization of healthcare services under Medicare plans. Despite this, UnitedHealth’s Optum healthcare services division showed strong performance, growing 9% to $65.1 billion. Additionally, the company posted earnings per share of $6.81, surpassing estimates. UnitedHealth Group Incorporated (NYSE:UNH) reaffirmed its 2025 profit outlook, projecting full-year revenue between $450 billion and $455 billion, demonstrating confidence in its long-term strategy.
The stock has faced challenges, declining 25.7% from its November 2024 peak of $630.73, significantly underperforming the broader healthcare sector. Over the last three months, shares have dropped nearly 23%, remaining below key technical benchmarks such as the 50-day and 200-day moving averages. However, analysts maintain a positive outlook, assigning the stock a “Strong Buy” rating and setting an average price target of $639.21, which implies a potential 36.4% upside. While UnitedHealth Group Incorporated (NYSE:UNH) has encountered short-term setbacks, its continued expansion in Optum and strong full-year revenue guidance reinforce its long-term growth prospects, making it an attractive investment at its current valuation.
UnitedHealth Group Incorporated (NYSE:UNH)’s revenue growth has been fueled by the rapid expansion of its OptumHealth division, which provides healthcare services through affiliated medical groups. From 2022 to 2024, OptumHealth’s revenue soared by 48%, outpacing the company’s overall revenue growth of 23%, driven by a greater number of patients under value-based care models, including at-home services. Additionally, UnitedHealth’s insurance business saw over 20% growth in both its Medicaid and Medicare segments, supported by an increase in customer enrollments.
UnitedHealth Group Incorporated (NYSE:UNH)’s strong market position, expanding OptumHealth division, and consistent revenue growth make it one of the top stocks to buy. Despite short-term challenges, its solid fundamentals, strategic investments, and analyst-backed upside potential position it as a compelling long-term investment.
Polen Focus Growth Strategy stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:
“We trimmed our positions in UnitedHealth Group Incorporated (NYSE:UNH), Amazon, ServiceNow, and Gartner during the quarter. We trimmed our position in UnitedHealth to fund the purchase of CoStar Group. Despite short-term margin headwinds, our long-term expectations for UnitedHealth Group remain virtually unchanged, with the trim simply reflecting what we view as a superior investment alternative.”
Overall, UNH ranks 6th on our list of top stocks to buy according to Marshall Wace LLP. While we acknowledge the potential for UNH 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 UNH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.