Health insurers had the best of both worlds last year. Their stocks benefited from a rotation into value and their profits weathered the inflationary environment as healthcare utilization remained low.
But as managed-care companies kick off earnings season, sentiment has shifted. That isn’t because of what the most recent earnings will show. In fact, industry behemoth UnitedHealth Group Inc. earlier this month reported a 12% increase in revenue to $82.79 billion, topping analyst expectations. Yet that did nothing for the stock, which is down 8.2% for the year.