Jason Snipe, CIO, Odyssey Capital Advisors UnitedHealth Group Inc UNH-N BUY Jun 24, 2024

Leader in the space. Trades at 16x forward PE, 11% growth. Last 5 years, earnings have growth 12% a year. 200-day MA trending higher, but price is a bit below that, so technical signals are neutral. Integrated model strong. Pricing power. Down 24% from recent highs on regulatory concerns, overdone.

Near term, this can't trade at prior multiples given volatility. Anything healthcare is uncertain. He still believes in the $600 price target. Great management. They have growth.

Is up 10% in the past month. Don't chase a red hot stock, but let it come in a bit (lower). Every time this spikes, it goes down. It's best of breed.

It reports Thursday. Not too high of a PE and not overly loved and purely domestic. It has pricing power.

Down today, so an opportunity. The largest health insurer can do anything it wants under this presidency.

Has plunged 22% since reporting last Thursday and dragged the sector down. What in the world happened? They missed top and bottom lines, but worse they cut their full-year earnings forecast by 12%, citing high medical costs in its Medicare plans. The health profiles of many patients has been inaccurate., especially in their managed care business. Their medical care ratio was 84.8% in Q1 2025, but they guided full year at 87.5%. However, UNH's peers are faring better. UNH is having execution problems and is no longer best of breed.

Fallen angel. Disappointing quarter, severely lowered guidance for 2025. 80% of its business is healthcare insurance. Taking market share in every segment they operate in. Funding pressure on government-funded healthcare insurance is curtailing short-term profitability; but this is building long-term value for shareholders. Secular trends of demographics and morbidity in the US are tailwinds. 

Fortress-like balance sheet, A+ credit rating. Buying back shares prolifically with FCF. Trading at 15x PE vs. the 5-year average of 19.5x. Yield is 1.97%.

It will be under pressure for some time and he's been very negative on this stock, but at $400 you can start a position on it.

Good entry point for long-term hold; potential generational buying opportunity. Reason for the drop is that they were classifying clinic patients as less sick than they actually were. Resulted in recouping less revenue, to the tune of ~$500 per month per patient, amounting to ~$3+B. Keep an eye on how quickly this amount is recovered. Yield is 2.1%.

Be mindful that this doesn't turn into a bigger problem of something fundamentally changing in the ever-evolving US healthcare system. Facts could change.

Major leader in the Medicare space. Recent rare miss on earnings, and he sold just before. Shares now well below 200-day MA, which is starting to trend down a little bit. Earnings growth rate now 6-7% going forward, at 14x forward PE.

Very oversold, around 25 RSI. At some point, shares will bottom and move higher. Be careful, shares seem to be in freefall right now. Doesn't see any major support levels. Wait for an opportunity, once it starts swinging up for real.