We recently published a list of 12 Most Undervalued Large Cap Stocks to Buy Now. In this article, we are going to take a look at where HCA Healthcare Inc. (NYSE:HCA) stands against other most undervalued large cap stocks to buy now.

On March 4, David Katz, Chief Investment Officer at Matrix Asset Advisors, joined ‘The Exchange’ on CNBC to share his perspective on the current state of the bull market and what February’s mixed action and sector rotation might signal for the rest of the year. Katz acknowledged that while people might not want to hear it, the volatility seen in February is likely to persist throughout the year, with both upside and downside movements. He emphasized that this creates opportunities for investors but also necessitates caution. Katz highlighted several positive factors supporting the market, which included a strong economy and solid corporate performance. However, he expressed concerns about certain policies from the administration, such as tariffs, immigration, and the relationship with the Fed. While these issues have been largely ignored by the market so far, Katz warned that they could eventually lead to a 3-5% correction. Despite this, he remained optimistic about the economy’s ability to navigate these challenges and recommended buying into market dips rather than chasing rallies.

To support his sentiment, Katz pointed to companies that have already experienced significant corrections and are positioned to perform well regardless of broader market movements. He highlighted their strong fundamentals, attractive valuations (most trading at under 13-14 times earnings), and good outlooks. He also noted that last year’s market leaders have slowed significantly, while sectors that underperformed are beginning to show meaningful improvement, a trend he expects to continue. This sector rotation suggests that investors should be prepared to adapt their strategies as different sectors gain momentum throughout the year.

Methodology

We used the Finviz stock screener to compile a list of the top stocks trading between $10 billion and $200 billion. We then selected stocks with a forward P/E ratio under 15 and made a list of 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A team of healthcare professionals in lab coats and masks meeting at a hospital ward.

HCA Healthcare Inc. (NYSE:HCA)

Forward Price-to-Earnings Ratio as of March 4: 12.27

Number of Hedge Fund Holders: 81

HCA Healthcare Inc. (NYSE:HCA) owns and operates a network of hospitals and healthcare facilities across the US. This network provides services like acute care, outpatient procedures, and specialized treatments in areas like behavioral health. All of these are aimed at serving diverse patient needs.

In 2024, the company’s network of hospitals saw a 3% increase in inpatient admissions, a 2.4% rise in ER visits, and a 2.8% growth in inpatient surgeries, year-over-year. Overall revenue grew by 6%, with net revenue per equivalent admission up 2.9%. The company is investing in network expansion with $5 to $5.2 billion allocated in capital expenditures for 2025. It’s focused on workforce development and shareholder returns. It recently authorized a new $10 billion share repurchase program. The company also noted that the 2024 hurricanes created a 250 million dollar impact on the 2024 financial year.

For 2025, HCA Healthcare Inc. (NYSE:HCA) projects revenues between $72.8 and $75.8 billion, with an earnings per share value of $24.05 to $25.85. The company expects equivalent admissions to grow 3-4% and revenue per equivalent admission to increase 2-3%.

Delaware Ivy Core Equity Fund stated the following regarding HCA Healthcare Inc. (NYSE:HCA) in its Q3 2024 investor letter:

“HCA Healthcare, Inc. (NYSE:HCA) – While long-term growth trends favor the healthcare sector, HCA is also benefiting from a short-term surge in healthcare utilization, likely the consequence of consumers catching up on care that was deferred during the pandemic. Growth in the insured population through healthcare exchanges also appears to be a more secular driver of increased demand.”

Overall, HCA ranks 5th on our list of most undervalued large cap stocks to buy now. While we acknowledge the growth potential of HCA as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HCA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.