Hotchkis & Wiley’s Q1 Letter Backs Elevance as Undervalued Despite Policy Hit

Overview

• Hotchkis & Wiley’s first‑quarter letter highlighted Elevance Health as a high‑quality insurer that still trades at a discount to the broader market.
• The fund attributed recent weakness to disappointing 2026 guidance, falling Medicaid enrollment, and proposed flat Medicare rates from the Trump administration.
• Management can lift margins over time through benefit design changes or higher premiums, which are common insurer tools that take time to show up in results.
• Market signals are mixed, with shares at $356.13 after a 21.65% one‑month gain but still down 13.91% over 52 weeks and a market value of $77.34 billion.
• Positioning and sentiment reflect caution as hedge‑fund holders eased to 78 from 82 and Truist lowered its Elevance price target while staying positive on healthcare services.