Here’s Why Elevance Health (ELV) Traded Lower in Q4
Artisan Partners, an investment management company, released its “Artisan Select Equity Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fourth quarter delivered another record-breaking performance for US tech equities. The fund’s Investor Class ARTNX, Advisor Class APDNX, and Institutional Class APHNX returned -1.36%, -1.32%, and -1.33% respectively, in the fourth quarter compared to a 2.41% return for the S&P500 Index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Artisan Select Equity Fund emphasized stocks such as Elevance Health, Inc. (NYSE:ELV). Elevance Health, Inc. (NYSE:ELV) is a health benefits company that operates through Health Benefits, CarelonRx, Carelon Services, and Corporate & Other segments. The one-month return of Elevance Health, Inc. (NYSE:ELV) was -3.46%, and its shares lost 21.31% of their value over the last 52 weeks. On February 28, 2025, Elevance Health, Inc. (NYSE:ELV) stock closed at $396.88 per share with a market capitalization of $90.231 billion.
Artisan Select Equity Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q4 2024 investor letter:
“Elevance Health, Inc. (NYSE:ELV) took a couple of blows this quarter. First, it warned that its Medicaid earnings would come in below expectations this year. The Medicaid business has been in the spotlight as a result of COVID-19. Medicaid rolls filled up during the pandemic, but then rolls started to come down as enrollees lost eligibility when the economy began to normalize. This has made estimating the severity and health trends of the remaining population difficult. So far this year, cost trends have been much worse than expected and are out of line with Elevance’s approved rate structure. Margins in the Medicaid business, therefore, will be down this year, and overall profits are likely to be flat. We believe this is a temporary situation. State Medicaid programs are legally required to pay actuarially sound rates to the providers of Medicaid services, such as Elevance. Rates are expected, therefore, to moveupwardoverthenext12to18months,restoring Elevance’s margins to a more normal level.
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