2 Hedge‑Fund Favorites That Just Got Too Cheap to Ignore
Quick Read
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The Stocks: UnitedHealth Group (UNH) crashed 50% in 2025 but now trades at 23.2x trailing P/E with hedge fund interest as AI adoption may reduce administrative costs. Live Nation (LYV) has surged 30% from November 2025 lows and is poised to benefit from its Department of Justice settlement closure and continued demand for live experiences.
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Some hedge funds are moving into beaten-down healthcare and entertainment stocks where valuations have reset after regulatory and operational pressures, signaling potential turnaround opportunities.
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It's hard to know what to do when there are so many risks dragging down share prices across one's portfolio. Whether it's the war in Iran, the latest Anthropic model that's crushing tech (again), fears that the Federal Reserve is going to crank up interest rates, or worries that AI is a bubble that's in the process of bursting, you don't have to look far to scare yourself out of buying the latest dip in stocks, or worse, scaring yourself out of the market altogether.
In any case, I think it's worth tuning into the hedge funds to get a gauge of where they're still confident and where the best value opportunities might lie in a market that's becoming increasingly difficult to navigate. Amid increased market volatility, there are more chances for stock pickers to make big swings. But should investors seek to swing in the direction that the smart money managers have?
That's the big question, and while hedge funds aren't immune to fumbles, especially when they opt to reach out and catch a falling knife, I do think that if there's a herd of hedge funds swooping in on a name, investors should take notice and perhaps consider investigating further.
READ: The analyst who called NVIDIA in 2010 just named his top 10 AI stocks
Here are three hedge fund favorites that I think are finally worth buying:
UnitedHealth Group
The smart money seemed to be rushing in to buy shares of UnitedHealth Group( NYSE:UNH ) into weakness in the latter three quarters of last year. Undoubtedly, the stock crashed 50% in what seemed like a hurry. And while much of the managed care space has been under serious pressure, UnitedHealth Group is one of those blue chips (it's a component of the Dow) that's too big to not take notice of.
Indeed, there are still problems over at the firm, but in terms of value and turnaround stories, I do think the odds do favor the bulls, especially after the vicious valuation reset. Today, the stock trades at 23.2 times trailing price-to-earnings (P/E) after fluctuating wildly in the days following its violent 2025 crash.
With some hedge funds lightening up their positions in the fourth quarter, questions linger about whether UnitedHealth's turn will take longer than expected. As it turned out, selling in Q4 was the right call, as shares have been horrid to own this year, now down just shy of 9% for 2026.
With a high-stakes quarter just weeks away, UnitedHealth faces another make-or-break moment. As management makes moves to stabilize things after a year of substantial margin compression and the DoJ overhang, I do like the risk/reward, especially as some AI bets look to drive down administrative costs.
Live Nation
Hedge funds were big fans of Live Nation( NYSE:LYV ) in the fourth quarter of 2025, with the likes of Daniel Loeb and Pat Dorsey scooping up a considerable amount of shares on weakness.
Undoubtedly, these are two investment legends, and whenever they set their sights on a stock in a rut, investors might want to do the same. Since the year began, though, shares have been rocketing higher, with the stock now up 13% year to date or 30% from its November 2025 lows.
At $163 and change, you'll pay a higher ticket price than much of the smart money, but I still think it's worth doing. With the firm ready to move on from its DoJ (do you sense a theme here?) settlement, I do think it's time to get bullish again, especially as the demand for experiences continues to work in the live concert king's favor. The big wild card is what kind of growth the firm could have as it continues expanding beyond the U.S. market.
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