UnitedHealth Group Inc (UNH)

They report this week. Listen for what they say about their cyber hack and the recent Medicare announcement (will this overhang endure?).

It reports next week. Is hitting a 52-week low today. He bought it higher, at $470, last month. Don't buy ahead of earnings. They're taking punch after punch. He's close to being stopped out of his position. He will watch for guidance. If it's a sell-the-news event, he might sell.

Massive compounder of 13-16% over decades. Endemic pressures on medical loss ratio. Under DOJ scrutiny on market concentration. Looking for 11% growth. Weakness provides good entry point, massive demographic tailwinds.

From a thematic standpoint, his firm is about a 1/3 weight in healthcare, so pretty underweight. Across the group, there are a few specific pharma companies, like LLY, that are really knocking the cover off the vault. And a bunch not doing so well.

Biotech and medical devices have been sort of sloppy. Now there's trouble with some of the managed-care companies. In general, even though the XLV price is moving higher, relative strength vs. the rest of the market has been hitting YTD lows. Underperforming sector. Better places to focus right now.

Down 6% in Q1, hurt by higher medical costs (like Humana) as the biggest health insurer in the US. Then after the bell today, the government limited increases in the health insurers' policies. The February data in health hack didn't help. But UNH has a good chance of a bounce back in the next two days.

You should look beyond tech which is pulling back now. Healthcare offers earnings growth ahead, like device companies. UNH has lagged this year due to utilization rates as medical expenses go higher. 

Great company. He owns ELV, trades at 4-5 multiple points lower, fundamentals are equally good.

Whole group has stalled a bit over medical cost ratios and medical costs in general. Government is repricing programs, and it's affecting margins. Companies will fight through it, trading inexpensively, very solid growth metrics. Not afraid to buy any of them, and his choice is ELV.

Won't touch this group, including Humana, which is in a massive reset.

The stock has been flat, but at current share prices he's been adding. UNH is the giant of US healthcare. Now is a great entry point. Trades at 18x PE. Can deliver 8-10% topline growth and around 8-9% bottom line. They have a great track record. They participate in Medicare Advantage with a 20% market share.

Owns shares in company. Usually weakness in shares before US election with worries of healthcare changes. Would recommend holding. 

The health sector is poised to rally after a rough year. UNH is a good company though he prefers Humana.

His largest position. A quality, defensive names that benefits from employment growth. Also, what will the weight-loss drug do for them? Smart managers. A permanent compounder.

Rallied 5% in Q3. Had come back after Covid and good for them, but he prefers Humana (he owns).

Likes the diversified business model. Leader. Decent valuation at 19x forward PE, with 12% earnings growth. Past year has seen a rotation out of managed care into more exciting pharma names. Stable revenues, downturn-resilient. Aging US demographics will benefit.