Patient Capital Management, based in Baltimore, released its first-quarter 2026 investor letter for the “Patient Opportunity Equity Strategy,” available for download here. The strategy’s long-term value approach aims to build wealth over time. It returned -5.96% net of fees in Q1, compared to the S&P 500’s -4.33% return. As per three-factor performance attribution model the underperformance was due to selection and interaction effects, partly offset by allocation effects. The year started strongly with markets reaching an all-time high in late January, then reversed. AI fears sparked a “SaaS pocalypse,” while ‘hyperscalers’ CAPEX worries affected returns. Software debt and illiquid markets unsettled private credit, leading most BDCs to restrict redemptions. Middle East conflicts pushed crude oil prices higher, further increasing the risk of inflation. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Patient Opportunity Equity Strategy highlighted stocks like UnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth Group Incorporated (NYSE:UNH) is a multinational health benefits company based in Eden Prairie, Minnesota. On April 10, 2026, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $304.33 per share. One-month return of UnitedHealth Group Incorporated (NYSE:UNH) was 6.60%, and its shares lost 48.16% over the past 52 weeks. UnitedHealth Group Incorporated (NYSE:UNH) has a market capitalization of $276.23 billion.
Patient Opportunity Equity Strategy stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2026 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) was the largest detractor in the first quarter, declining 15.7%. Shares came under pressure following a disappointing Medicare Advantage rate update, as CMS proposed just a 0.09% reimbursement increase for 2027, well below investor expectations for a mid-single-digit increase and insufficient to offset rising medical cost trends. However, as we entered the second quarter, CMS revised its final Medicare Advantage payment rate to a 2.48% increase, materially above the 0.09% initially proposed. We continue to believe UnitedHealth remains a category leader with a uniquely integrated platform spanning health benefits (Optum Health), pharmacy benefits management (Optum Rx), and health services (Optum Insight). The company’s long-term earnings power and competitive positioning remain, in our view, intact. Management continues to target 13-16% long-term EPS growth, which they expect to resume in 2027. We took the pullback as an opportunity to increase our exposure at what we believe is a compelling valuation for a business of this quality. We remain patient in the interim collecting a 3% dividend yield supported by a consistent buyback program.”
UnitedHealth Group Incorporated (NYSE:UNH) is in 14th position on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 145 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the fourth quarter, up from 140 in the previous quarter. In 2025, UnitedHealth Group Incorporated (NYSE:UNH) reported revenues of nearly $448 billion reflecting 12% increase from 2024. While we acknowledge the risk and potential of UnitedHealth Group Incorporated (NYSE: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 UnitedHealth Group Incorporated (NYSE: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 the list of hedge fund favorites with strong setup in 2026. In addition, please check out our hedge fund investor letters Q1 2026 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.
