Here's Why Madison Large Cap Fund Sold Elevance Health (ELV)

Madison Investments, an investment advisor, released its “Madison Large Cap Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund decreased 2.2% in the third quarter compared to an 8.1% gain for the S&P 500 Index. The current market focus on short-term profits led the fund to underperform the benchmark considerably in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Madison Large Cap Fund highlighted stocks such as Elevance Health, Inc. (NYSE:ELV). Elevance Health, Inc. (NYSE:ELV) is a health benefits company. The one-month return of Elevance Health, Inc. (NYSE:ELV) was -13.32%, and its shares lost 26.43% of their value over the last 52 weeks.  On November 10, 2025, Elevance Health, Inc. (NYSE:ELV) stock closed at $303.78 per share, with a market capitalization of $67.512 billion.

Madison Large Cap Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its third quarter 2025 investor letter:

"During the quarter, we also sold two relatively small holdings in Elevance Health, Inc. (NYSE:ELV) and Liberty Broadband. Elevance is the nation’s second-largest managed care provider. While we continue to view the management team as strong operators, the industry outlook has become more challenging across both Medicare Advantage and state Medicaid programs. Elevance’s scale and diversity of operations, including an in-house connected care operation, have helped blunt the impact of recent increases in medical costs. However, we now believe that the business will face a longer road to recovery."

Elevance Health, Inc. (NYSE:ELV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held Elevance Health, Inc. (NYSE:ELV) at the end of the second quarter, which was 75 in the previous quarter. In Q3 2025, Elevance Health, Inc. (NYSE:ELV) reported $50.1 billion of operating revenue, an increase of 12% year-over-year. While we acknowledge the potential of Elevance Health, Inc. (NYSE:ELV) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Elevance Health, Inc. (NYSE:ELV) and shared PBCM Concentrated Value Strategy's views on the company. In addition, please check out our hedge fund investor letters Q3 2025 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.