Top 5 Health Insurance Stocks to Buy

3. CVS Health Corporation (NYSE: CVS)

Number of Hedge Fund Holders: 62

CVS Health Corporation (NYSE: CVS) is a Rhode Island-based healthcare company founded in 1963. It is placed third on our list of top 10 health insurance stocks to buy. CVS Health stock has returned more than 41% to investors over the past year. The firm has stakes in many healthcare-related businesses, including pharmacies. It owns and operates the CVS Pharmacy, a retail pharmacy chain, as well as the CVS Caremark, a pharmacy benefits manager. Aetna, a health insurance provider, is also owned by CVS Health Corporation. 

CVS Health Corporation (NYSE: CVS) posted first quarter 2021 results on May 4, reporting earnings per share of $2.04 that beat market predictions by $0.32. The revenue for the first three months of the year was $69 billion, up 3.5% year-on-year. 

Out of the hedge funds being tracked by Insider Monkey, Chicago-based firm Harris Associates is a leading shareholder in CVS Health Corporation (NYSE: CVS) with 8.5 million shares worth more than $643 million. 

In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and CVS Health Corporation (NYSE: CVS) was one of them. Here is what the fund said:

“We sold our position in CVS Health Corp. to allocate capital to companies with larger margins of safety. During the five years that we owned CVS Health Corp., the company acquired Aetna. At the time, we also owned Aetna, and we believed the combination of the two companies would create additional value. After the acquisition, its business performance has been disappointing. We reevaluated our assumptions and determined its value has not grown.”