Industry Overview - The healthcare industry, particularly companies like CVS Health, is facing significant challenges due to rising medical costs, increased utilization rates, regulatory pressures, and budget cuts [1] Company Insights - CVS Health and its peers are struggling to find stability in a turbulent environment marked by various financial pressures [1] - The investment strategy focuses on identifying companies with strong qualitative attributes, purchasing them at favorable prices based on fundamentals, and maintaining long-term holdings [1]

Market Valuation & Investment Opportunity - Health insurers are largely trading at six times their estimated 2028 EPS, except for UnitedHealth, which is trading closer to ten times, suggesting a potential buying opportunity given the perceived undervaluation [1][2] - The market has priced in the problems faced by these businesses, such as mispricing Medicare Advantage and healthcare exchanges, into their valuations [2] Company-Specific Performance - CVS has shown improvement with two consecutive quarters of beating numbers in its core insurance segment and anticipates tailwinds next year [3] - Cigna is performing inline, and Alignment Healthcare, specializing in Medicare Advantage, is also doing well; Humana is meeting its targets for the year [3] - UnitedHealth is experiencing widespread problems, particularly in Medicaid and exchange fundamentals, while Centene and Molina have also faced challenges in these segments [4] Timing of Challenges - CVS faced significant challenges in 2024, while UnitedHealth's problems emerged in 2025, indicating varying timelines for when these companies encountered difficulties [5]

Oscar Health cut its outlook and missed estimates, the latest health insurer to be rocked by trouble in Affordable Care Act marketplaces https://t.co/hkmMPgQ3oG ...

Government Funding & Policy - US government funding for health insurers is reversing more abruptly than expected [1] - This reversal casts doubt on strategies that have driven profit growth for years [1] Industry Impact - The changing funding landscape impacts the health insurance industry's strategies [1]

Monday wasn't a very good day for health insurers, and if a day's not good for health insurers you can bet Cigna Group (CI -5.49%) stock took it on the chin. The blow came from the highest levels of government, spooking investors and driving down the stock prices of numerous healthcare-institution stocks. Cigna's share price eroded by more than 5%, on a day when the S&P 500 index rose by over 3.2%. A talking-down from Trump PBMs on the hot seat Fairly or otherwise, PBMs have been sharply criticized by many ...