Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The strategy generated a total return of 15.3% net of fees in the quarter compared to the strategy’s unmanaged benchmark, the S&P 500 Index’s 10.9% return. According to a three-factor performance attribution model, the selection effect contributed positively to the portfolio’s performance, which was partially offset by allocation and interaction effects. In addition, you can check the fund’s top 5 holdings to know its best picks in 2025.
In its second quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as UnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company that operates through UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx segments. The one-month return of UnitedHealth Group Incorporated (NYSE:UNH) was -4.62%, and its shares lost 49.04% of their value over the last 52 weeks. On July 17, 2025, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $288.07 per share, with a market capitalization of $261.32 billion.
Patient Capital Opportunity Equity Strategy stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2025 investor letter:
“This quarter we entered five new positions, while exiting three. We initiated a position in UnitedHealth Group Incorporated (NYSE:UNH), one of the largest healthcare companies in the United States, after the stock declined more than 50% from its 2025 highs, reaching multi-year lows. The drop followed a rare misstep in its Medicare Advantage business, where higher-than-expected costs drove margin compression, a cut to EPS and ultimately, the withdrawal of forward guidance. In response, the company announced a leadership change, bringing back former CEO and current Chairman Stephen Hemsley. UNH has long been a market favorite for its consistency in growth, earnings and return on capital. The disappointment led investors to flee. While the short-term outlook remains murky, over the long-term we have confidence the company can improve underwriting margins. With all competitors focused on underwriting to margins, future pricing should be more rational and in line with current usage trends. Rebuilding investor confidence may take time, but we believe UNH’s integrated platform and unique asset mix position it to remain a category leader and return to strong returns over time. Following the sell-off, several insiders stepped in to buy stock, most notably Stephen Hemsley with a $25M purchase and the CFO, John Rex, with $5M. The company also has an $8.4B buyback authorization (roughly 3% of shares) and a robust 10% free cash flow yield. Management remains confident in its ability to compound EPS at a 13 16% rate over the long term. We view the recent dislocation as an opportunity to own a high-quality compounder at a compelling valuation.”
A senior healthcare professional giving advice to a patient in a clinic.
UnitedHealth Group Incorporated (NYSE:UNH) is in 18th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 139 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the first quarter, which was 150 in the previous quarter. While we acknowledge the risk and potential of 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 and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered UnitedHealth Group Incorporated (NYSE:UNH) and shared Vulcan Value Partners’ views on the company. In addition, please check out our hedge fund investor letters Q2 2025 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.
