UnitedHealth Group Inc (UNH)

Low beta, more conservative name. Very significant scale. Far ahead of peers with strong alignment of medical insurance, pharmacy benefits, and healthcare services. Aging demographics are key drivers of demand. Shares are 19% off their highs, an opportunity. 18x PE for 11% growth. Yield is 1.7%.

Most diversified managed health care company (own clinics, software & insurance). Recent assassination of CEO not a major concern in terms of outlook for the business (although was a tragedy). Ability to raise prices very strong, with excellent margins on products. Will continue to buy shares. 

The entire US health insurance group is embroiled in a controversy that was unfortunately set off by the murder of UNH, specifically talk about how claims are treated at UNH. These stocks are falling, but hang on and let this pass and see how different parties react. There will always be a place for health insurance companies in the US.

They report Tuesday. Are the only health insurer that regularly beats earnings. Good risk/reward.

He started sell this in early 2023. Is up 20% since Q2, though. He sold it because loss ratios were off, though stabilizing now. 

Is a reliable compounder who always beat and raise, with reliable earnings growth. Solid. They raised their dividend 12%. Good upside to come.

They recovered from a cyber attack. Earnings are growing. Their HMO (Health maintenance organization) is the best in the business. It's a safe play in healthcare.

Provides benefits to 53M members globally. Recent spike lately, but still sees more profits ahead. Upside to target of about 20%. Last earnings report better than expected. Under a Trump presidency, could see reduced regulation and improved reimbursement. Yield is 1.49%.

Averaged 9% annual upside over last 3 years, and 16% for the last 5. Fundamentally a 9/10.

It reports tomorrow and health stocks are all way too volatile in an election year.

They report next week. The big question is Medicare reimbursements; political winds are pushing down on this. Is UNH off-setting this with prices and costs? At 17x forward PE, he'll take the chance.

They're big enough to set prices, but they face government headwinds, so this is a wild card.

Won't buy it ahead of time. They've beaten the last 6 quarters and expects it again. But given its headwinds, he'd be cautious buying pullbacks.

He used to own it and likes it long term. But the government requirements are shifting the risk in Medicaid and Medicare payments to doctors. If doctors spend more on a patient, then doctors must eat that loss and don't receive all the Medicare/Medicaid to cover that amount. This has hurt companies like Humana. But UNH has such a dominant position in the market and is a permanent compounder.

Is down 7% this year, but was upgraded today and their pharmacy business is up 12%. In election years, healthcare struggles, and UNH has recovered from February's cyber attack. He likes this as a second-half 2024 and 2025 play. It's an earnings compounder.