UnitedHealth Group Inc (UNH)

(Top Pick Aug 1/14, Up 63.33%) It got taken out. They benefited by Obamacare.

In the healthcare industry which have all done very well. There is consolidation going on and the sector has outperformed. Wouldn’t be chasing this right now. The whole sector has benefited because of the aging population. The bigger you get, the lower your infrastructure costs are, and the more your network expands. Wait for a pullback.

This company sells health plans. They are about the biggest in the US. There is a growing population of people over 65 and 85 who are buyers of these plans. Obama care has been supportive of insurance plans across the board. This is a business that is consolidating. Beat their most recent quarter by 8%. Dividend yield of 1.68%.

(Top Pick Jul. 11/13, Up 27.78%) They raised their guidance going forward. Have an increasing opportunity to grow the business. He would focus more on biotech, but the whole sector has been performing well.

(A Top Pick July 23/13. Up 18.88%.) There was a feeling they were going to get hurt by Obama care, but it wasn’t. Two weeks ago consensus was $126, and they reported $142 for the quarter, 2 quarters in a row of above-average growth. A nice safe place to hide and have exposure to the US healthcare.

Great-looking chart and a good company. These stocks sometimes get ahead of themselves and arc off the trend line, and sometimes retrace back to the trend line. This might be due for one of those pullbacks. However, the trend is your friend and the stock is going up.

If you are looking to participate in this sector, this is the right one. Well managed. Had some issues several years ago with options. At 13X earnings, it is very good valuation. You are looking at probably under 10% earnings growth but you are not paying a lot for that.

Prefers Well Point. Likes this one. CEO warned in recent earnings call that with Obamacare there would be margin squeeze. Well Point has a better diversified exposure there.

One of the best performing sectors this year in the market. The group has broken out of a 12 year sideways period. This one was widely under owned. He likes managed healthcare. Thinks there is upside in the stock and in earnings. Thinks you will see dividend increases.

Largest “managed care” company in the US. This stock would benefit from higher interest rates as they would get to raise their rates as rates go up. Quarter was a blow out quarter and the stock has done nothing but go up higher ever since. Even at the current price, it is at about 13X earnings and could go to 15X giving the benefit of earnings growth. 1.5% yield.

Feels this is well-positioned given the turmoil of Obama care and the new mandate. You really want to move towards the very large HMOs, where there is scale and the ability to adapt. He prefers Wellpoint (WLP-N).

Healthcare, as a group, tends to be one of the best performing parts of the market. This is because there is a heavy domestic focus on the US and also it is not so economically sensitive. There is a secular bull market in spending on health in the US. 90% of this company’s revenue is coming from premiums on the plans that they sell. 3%-7% growth. Yield of 1.64%. They have a platform called Optum (?), an information services platform that they used to generate fees across a number of different businesses. Cash flow grew at 16% last year and this year will be at 29% of revenues and by 2015 it will be 40% of their revenues.

(Top Pick Jul 25/12, 18.67%)