Is UnitedHealth Group (UNH) A Smart Long-Term Investment?

Wedgewood Partners, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2022, the fund’s Composite (net) declined by -10.6%. The S&P 500 Index declined by -4.6%. The Russell 1000 Growth Index declined -by 9.0%, while the Russell 1000 Value Index declined -by 0.7%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Wedgewood Partners mentioned UnitedHealth Group Inc. (NYSE:UNH) and explained its insights for the company. Founded in 1977, UnitedHealth Group Inc. (NYSE:UNH)  is a Minnetonka, Minnesota-based multinational managed healthcare and insurance company with a $503.2 billion market capitalization. UnitedHealth Group Inc. (NYSE:UNH)  delivered a 6.51% return since the beginning of the year, while its 12-month returns are up by 37.13%. The stock closed at $534.82 per share on April 15, 2022.

Here is what Wedgewood Partners has to say about UnitedHealth Group Inc. (NYSE:UNH) in its Q1 2022 investor letter:

UnitedHealth Group contributed to performance during the quarter as the Company’s longterm, mid-teens earnings growth algorithm remained intact. Further, as political wrangling in the U.S. continues unabated, we suspect investors have become more confident that little will be done on the legislative front to derail the status quo between private health insurance and Medicare/Medicaid. COVID trends continue to ebb throughout the healthcare system; however, there is a sustainable benefit to the cost structure of U.S. healthcare – particularly related to virtual care. Virtual care is not only becoming more acceptable but is now preferred by many patients and care providers which should lead to less overhead (e.g., office space) that can be reinvested in better patient outcomes. Last, the Centers for Medicare and Medicaid Services proposed a nearly 8% hike in revenue for Medicare Advantage 2023, which should allow for ample flexibility in benefit enhancement and continued incentive to grow this franchise.”

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Our calculations show that UnitedHealth Group Inc. (NYSE:UNH) ranks 19th on our list of the 30 Most Popular Stocks Among Hedge Funds. UnitedHealth Group Inc. (NYSE:UNH) was in 96 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 95 funds in the previous quarter. UnitedHealth Group Inc. (NYSE:UNH) delivered a 14.42% return in the past 3 months.

In April 2022, we published an article that includes UnitedHealth Group Inc. (NYSE:UNH) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

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