10 Most Popular Hospital And Medical Service Plan Stocks Among Hedge Funds

by: Insider Monkey

Healthcare is one of most robust growth areas over the past decade. Investors are worried about increased regulations and government involvement but health reform is likely to increase the coverage and improve the bottom line for hospital and medical service plan stocks. We track hedge fund managers’ move in this sector to sort through the various publicly traded companies. Hedge funds have access to more data and experts who can analyze the trends and the effects of the thousands of pages of recently passed laws and regulations. In this article we compiled 10 most popular hospital and medical service plan stocks among hedge funds.



No. of hedge funds

WellPoint Inc.



UnitedHealth Group Inc.



CIGNA Corporation



Aetna Inc.



DaVita Inc.



HCA Holdings, Inc.



Humana Inc.



Tenet Healthcare Corporation



Universal Health Services, Inc.



HealthSouth Corporation



1. WellPoint Inc. (WLP): Well Point is a health benefits company that provides services to its more than 33 million medical members. The company has a market cap of $23.6 billion, and is currently hovering around $67 per share. The stock advanced 19% in 2011. More hedge funds - 45 - invested in Well Point at the end of the third quarter of 2011. Jean-Marie Eveillard’s First Eagle Investment Management had the most in Well Point among the hedge funds we track, with 3.42 million shares or about $223 million. That was after the 4% increase in the firm’s position in the third quarter.

2. UnitedHealth Group Inc. (NYSE:UNH) provides health services to the participants in its health system. The company has a $55 billion market-cap and is currently approaching $53 per share. The stock returned 43% in 2011, beating the S&P500’s return of 3% to the ground. Forty-three hedge funds held UnitedHealth in the third quarter. Boykin Curry’s Eagle Capital Management had the largest chunk of shares. The firm slightly increased its position by 3% and had 7.63 million shares as of the end of September. Bill Miller and David E. Shaw also had large stakes in UNH in the third quarter (see Bill Miller’s top stock picks).

3. CIGNA Corp (NYSE:CI): The company is an insurance and related services provider. It has a market cap of nearly $12 billion. Cigna is now trading at about $43, and returned 16% in the past year. There are 42 hedge funds invested in the stock in the third quarter 2011, Jeffrey Altman’s Owl Creek Asset Management decreased its position by 13% and had about 7.3 million shares in the third quarter. Steven Cohen also had a small position in CI during Q3 (see billionaire Steven Cohen’s favorite stocks).

4. Aetna Inc. (NYSE:AET): Aetna offers a range of health insurance products and related services to approximately 35 million people. AET has a market cap of around $16 billion and trades at about $44. The stock fared quite well last year and returned 40%. It was in 38 hedge funds’ portfolios during the third quarter. Arthur B Cohen and Joseph Healey’s Healthcor Management had more shares of AET than any other hedge funds we track. The firm boosted its AET position by 16% and had exactly 5 million shares as of the end of September.

5. DaVita Inc. (NYSE:DVA) is a provider of dialysis services in the United States. The company has a market cap of more than $7 billion and trades at about $77 per share. The stock managed to beat the S&P500 and returned 9% in the past year. Andreas Halvorsen’s Viking Global had the most among 31 hedge funds that invested in the stock during third quarter. The firm had 8.61 million shares of DVA through the end of September, after the 37% increase in its position.

6. HCA Holdings, Inc. (NYSE:HCA) as a non-government hospital operator provides healthcare services. HCA has a more than $9 billion market-cap and is currently trading at $21. HCA lost big in 2011, declining by nearly 30%. Thirty hedge funds invested in the stock in the third quarter. The largest hedge fund stakeholder was Larry Robbins, whose Glenview Capital had more than 7.8 million shares of HCA in the third quarter. That figure was after Glenview boosted its position by 143%. Ken Griffin’s Citadel Investment Group boosted its position by 48 times and revealed slightl7 less than 1 million shares (see billionaire Ken Griffin’s top stock picks).

7. Humana Inc. (NYSE:HUM): Humana provides healthcare and full-service and wellness solutions. The company has a market cap of $15 billion and is trading at about $91 per share. Humana was the biggest winner here, rising more than 60% in 2011. There were 29 hedge funds invested in Humana in the third quarter. Andreas Halvorsen’s Viking Global had the largest chunk of shares - more than 4 million. This is after the 47% increase in the firm’s position.

Other hospital stocks including Tenet Healthcare Corp (NYSE:THC), Universal Health Services, Inc. (NYSE:UHS), and HealthSouth Corp (HLS) have smaller market caps. As a group, these 10 stocks averaged a return of 16%, which beat the S&P500’s 3% return in 2011.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.