Elevance Health Inc (ELV-N)

Their report last week disappointed--their big problem involves Medicaid with their medical cost ratios were much higher. The street saw it as a misstep due to mis-timing.

Trades at a cheaper multiple than leader UNH. Likes it.

Health insurance companies have done extremely well and will continue to do so. And this despite continued bombardment to try to tamp down profitability in the sector (its predecessor, Anthem, was trading around $7 a share in 1995). Company expects revenue to grow 10%+ and earnings in low teens. Trades 12-13x earnings. Great setup for long-term hold.

Don't get caught up in the news of the day, think about where it's likely to be in 5-10 years. Use these times of weakness to add to or start a position.

Trades at 4-5 multiple points lower than UNH, fundamentals are equally good.

Whole group has stalled a bit over medical cost ratios and medical costs in general. Government is repricing programs, and it's affecting margins. Companies will fight through it, trading inexpensively, very solid growth metrics. Not afraid to buy any of them, and his choice is ELV.

Based on chart performance, this stock could be building a base. Waiting for new highs before purchasing. Could be promising. 

Out of favour in 2023. Healthcare is one of the areas where he expects the rotation to go, big opportunity. Stock's flat for last 2 years, but EPS is up 27%. 15x PE this year, 13.5x next year. Estimates of double-digit revenue growth and 15% annual earnings growth. The insurers, in particular, are ripe for a rebound. Yield is 1%.

Continues to like it. Healthcare has been in the penalty box the past year. ELV was Anthem. It insures 48 million Americans. Growing 15% annually, but trades at only 14x earnings. 

Insurer margins squeezed as procedures delayed by Covid now go ahead. Market's overreacted to this. Still a good long-term hold. Confident in management. Over next 5-10 years, healthcare spending will be double GDP growth.

It is both a growth and value stock being a health insurer for corporations. It also provides management for the Federal Government through Medicare and Medicaid as well as its own networks. It is slowly becoming more vertically integrated. Being more on the defensive side it helps to balance his portfolio.       Buy 21  Hold 4  Sell 0

Excellent business with good long term prospects.
Very strong balance sheet.
Large health insurance company with ~45M customers. 
Strong management team that is good at running business. 

Healthcare notoriously left out of most recent high-beta rally. Don't give up. Don't chase low-quality, high-beta companies just because they're going up for 6 weeks. Go with good quality companies, and you will be rewarded. He's sticking with it. Demographic tailwind, 6% FCF yield, expects $33 EPS in 2023 which is a 15x PE.