What Makes Elevance Health (ELV) an Investment Choice?

Pelican Bay Capital Management, an investment management company, released its third-quarter 2025 investor letter. A copy of the same can be downloaded here. PBCM Concentrated Value Strategy returned 7.8% in the quarter, compared to a 5.3% return for the Russell 1000 Value Index. YTD, the fund returned 11.2% compared to 11.6% for the index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, PBCM Concentrated Value Strategy highlighted stocks such as Elevance Health, Inc. (NYSE:ELV). Elevance Health, Inc. (NYSE:ELV) is a health benefits company. The one-month return of Elevance Health, Inc. (NYSE:ELV) was -10.04%, and its shares lost 24.81% of their value over the last 52 weeks. On November 7, 2025, Elevance Health, Inc. (NYSE:ELV) stock closed at $317.78 per share, with a market capitalization of $70.623 billion.

PBCM Concentrated Value Strategy stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its third quarter 2025 investor letter:

“This quarter we also initiated a new position in Elevance Health, Inc. (NYSE:ELV), a leading health insurance company with over 45 million members, operating through its well-known brands: Anthem Blue Cross Blue Shield for private employers and Wellpoint for Medicare and Medicaid plans. A key competitive advantage is its in-house pharmacy benefit manager (PBM), Carelon.

ELV has been one of the better operators in the insurance business. Unlike many other competitors who pursued growth at any cost in recent years, ELV has maintained disciplined pricing and elevated underwriting standards, even shedding members when competition intensified. The company’s organic investments and acquisitions have delivered double-digit ROIC, strong free cash flow, and consistent capital returns through dividends and buybacks. Unlike many of their peers, ELV did not compromise their balance sheet with dilutive acquisitions. ELV has a net cash position of $4.5 billion.

The health insurance industry has faced significant pressure this year. Profitability in Medicaid and Medicare has weakened due to aggressive pricing from competitors like CVS and UnitedHealth (UNH), as well as higher-than-expected utilization of behavioral health, GLP-1 drugs, and elective surgeries. While ELV maintained more rational pricing and even declined some Medicare business, it was not immune, lowering EPS guidance by 13% or about $5 per share…” (Click here to read the full text)

In another article, we covered Elevance Health, Inc. (NYSE:ELV) and shared the list of most undervalued long-term stocks to buy. In addition, please check out our hedge fund investor letters Q3 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.