We recently published a list of the Analyst Says These 10 Stocks Can Benefit if Donald Trump Wins US Election 2024. Since UnitedHealth Group Incorporated (NYSE:UNH) ranks 1st on the list, it deserves a deeper look.
Wolfe Research said in a note earlier this month that the odds have shifted in favor of Donald Trump following the first presidential debate. However, the firm believes we can see several “unexpected twists and turns” ahead. Wolfe Research also shared a list of stocks that could be potential winners should Donald Trump become the President of the US.
What could happen if Donald Trump becomes President of the US has been a topic of debate and discussion on Wall Street over the past several months. In late January, when the Russell 2000 index jumped, Zhiwei Ren, portfolio manager at Penn Mutual Asset Management, reportedly said that investors might be flocking to the “Trump Trade.” The Russell 2000 is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index. Ren said, according to Wall Street Journal, that since Trump is a supporter of low interest rates and less regulation, small-cap stocks, which thrive under Dovish economic policies, were reacting positively to the increasing chances of Donald Trump becoming the leading Republican candidate for the upcoming elections.
In this article, we first scanned Wolfe Research’s basket of stocks the firm believes could be potential winners in case of a Trump presidency. From these stocks we picked 10 companies with the highest number of hedge fund investors.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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UnitedHealth Group Inc (NYSE:UNH)
Number of Hedge Fund Investors: 104
Wolfe Research expects UNH to benefit from a Trump presidency.
Analysts expect Unitedhealth Group Inc’s (NYSE:UNH) EPS to expand by about 10.5% to $27.75 by the end of 2024. The global health insurance industry is set to grow at a CAGR of 6.2% from 2024 through 2032. This growth would bode well for industry leaders like UNH.
In May, Bank of America Securities analyst Kevin Fischbeck reiterated a Buy rating on UnitedHealth Group Incorporated (NYSE:UNH) with a price target of $675.00. The analyst highlighted UnitedHealth’s efforts to grow its long-term EPS to 13-16%, strong value-based care model, and adaptable business strategy.
UnitedHealth revenue in the first quarter increased by 8.6% year-over-year to $99.8 billion. Its net loss per share of $1.53 was due to the $7.1 billion charge from the sale of its Brazil operations. In 2025, the company’s adjusted EPS is expected to jump 12.3% and by 13.2% in 2026.The company’s forward P/E of 17 is still lower than its 10-year average P/E of 20.2.
ClearBridge All Cap Growth Strategy stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its first quarter 2024 investor letter:
“We were also active in adding to stable bucket investments PayPal and UnitedHealth Group Incorporated (NYSE:UNH) where negative near-term sentiment led to more attractive risk/reward profiles. We added to our UnitedHealth position after shares were pressured due to fears over competition among managed care providers and rising medical loss ratios in the industry. We believe the company will be able to “re-price” for higher medical costs, making this pressure transitory and we see competitive concerns as overblown.”
Overall, UnitedHealth Group Incorporated (NYSE:UNH) ranks 1st on Insider Monkey’s list titled Analyst Says These 10 Stocks Can Benefit if Donald Trump Wins US Election 2024. While we acknowledge the potential of UnitedHealth Group Incorporated (NYSE:UNH), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UnitedHealth Group Incorporated (NYSE:UNH) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.