Here's Why Elevance Health (ELV) Declined in Q4

Hotchkis & Wiley, an investment management company, released its “Hotchkis & Wiley Large Cap Fundamental Value Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The Hotchkis & Wiley Large Cap Fundamental Value Fund returned - 0.91% in the fourth quarter, outperforming the Russell 1000 Value Index’s -1.98% return. However, for the full year, the portfolio underperformed the index returning 12.81% vs. 14.37% for the index. For more information on the fund’s best picks in 2024, please check its top five holdings.

In its fourth quarter 2024 investor letter, Hotchkis & Wiley Large Cap Fundamental Value 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 9.23%, and its shares lost 16.28% of their value over the last 52 weeks. On March 28, 2025, Elevance Health, Inc. (NYSE:ELV) stock closed at $432.00 per share with a market capitalization of $98.216 billion.

Hotchkis & Wiley Large Cap Fundamental Value Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q4 2024 investor letter:

"Elevance Health, Inc. (NYSE:ELV) is a large health insurer, and one of the largest commercial insurers. The company’s shares came under pressure in the quarter following disappointing earnings and guidance as well as a broader negative turn in investor sentiment towards the group. Our overall thesis remains unchanged. We believe the company is undervalued due to skepticism around margins and growth. Higher medical spending is a long-term positive for the company."

Elevance Health, Inc. (NYSE:ELV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 73 hedge fund portfolios held Elevance Health, Inc. (NYSE:ELV) at the end of the fourth quarter compared to 67 in the third quarter. While we acknowledge the potential of Elevance Health, Inc. (NYSE:ELV) as an investment, 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We covered Elevance Health, Inc. (NYSE:ELV) in another article, where we shared River Road Large Cap Value Select Fund's views on the company. In addition, please check out our hedge fund investor letters Q4 2024 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.