UNH

Unitedhealth Group

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$115.43 +28.83%
UnitedHealth (Ticker: $UNH) - Brief Breakdown
For the full article check it out here.

Company Description and Qualitative Analysis
UnitedHealth Group $UNH operates four segments of health care: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. UnitedHealthcare offers consumer-oriented health benefit plans and services for employers. UnitedHealth has the highest market share of any health insurance company and the highest market cap. UnitedHealth offers every aspect of health insurance and the moat for insurance companies is massive as long as the companies do not decide to switch providers. The switch generally takes some time and is only evaluated once or so a year, therefore consistent and anticipated profits will be made throughout the year.

Quantitative Analysis
At the time of this writing (9/12/2022), UNH is trading at $524.34 with a market cap of $490.46B and a 52-week range of $383.12 - $553.29. In Q2 of 2022, UnitedHealth revenues grew 13% YoY to $80.3 billion, earnings from operations were $7.1 billion up 19% YoY, and cash flows from operations were 1.3x net income to $6.9 billion. The price to earnings ratio (P/E) is 27.39, the net margin is 5.99%, debt to equities ratio is 2.05, and the dividend yield is 1.18%. You can view UNH’s 2022 Q2 earnings here and their 2021 Annual Report here.

Bullish Thesis
Here are three points to support the bullish thesis:
  • Diversification of Health Care: UnitedHealth offers all kinds of health insurance products that covers every possible health issue someone may have. The complete coverage of health, eye, and dental insurance allows UnitedHealth to be a one stop shop for health insurance for companies. This allows ease of use for employers to provide great benefits to their employees without having multiple vendors.
  • Moat: Companies very rarely switch providers. As long as companies do not go under or fail, insurance will consistently be provided by employers. As UniteHealth is diversified and gives companies no reason to switch (i.e. drastically hiking rates and lowering coverage), companies will stay as loyal customers for some time.
  • Health Insurance Necessity: Health insurance is an increasing necessity in today’s society. Now with the passing of the COVID-19 pandemic, everyone is seemingly more conscious of their own health and that also comes with health insurance. More potential employees will take benefits into account with the growing number of jobs available.
Bearish Thesis
Here are three points to support the bearish thesis:
  • Steady growth with no potential shoot up: Insurance is not a sexy business that will skyrocket in profits so I do not imagine the stock price will ever do that as well. Insurance and UNH will be a steady gaining profit company that does distribute a dividend, but if you’re looking for large growth this is not the play.
  • Potential Influx of Claims: There has been a delay on major surgeries, procedures and people generally have not been getting as sick because they have stayed in their home with lockdowns. Now that people are getting surgery and going back into the office, there is more risk of people that will be filing claims for their health insurance. The increased claims cuts into the profits of the company and this could be a potential case to lookout for.
  • Audit of Data Storage: UnitedHealth is being audited by the Department of Justice for their data practices, according to Bloomberg. The data practices caused the acquisition of Change Healthcare Inc blocked, although an internal audit showed no misuse of data. This case is not ideal for a company in the short term, but it could be an opportunity to buy on some negative publicity if you believe in the business long term.
For the full article check it out here.
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Stock Breakdown: Healthcare Overview
For the full article check it out here

Macro Minute:
The macro economy has gotten spicy. The Euro is teetering around $1 USD, there is a massive energy shortage in Europe with maybe the most notable country being Germany, the United States keeps sending money abroad and is giving Americans breaks on expenses (i.e. student loan forgiveness), the Russia-Ukraine conflict is persisting, and the potential for a China-Taiwan conflict is growing. I’ve seen a lot of Twitter spaces and people in “fintwit” believe that inflation has peaked, but I believe we are far from it. I believe we are in a slight run up before another big downturn. I see way too many potential geopolitical and macro events that could keep this global recession going. I do not see any progress where I believe these issues will be resolved quickly or in a timely manner.

Sector Description: What is the Technology Industry?
The healthcare industry has been at the forefront of the news in the past two or so years with the COVID-19 pandemic. Healthcare spending has increased drastically due to the pandemic, but even before the pandemic broke out, NHE predicted the health share of the economy to rise from 17.7% to 19.7% in 2028. Healthcare spending is increasing and more people are becoming reliant on healthcare. Healthcare can be defined as anything from insurance companies, retail stores, hospitals, and essentially everything surrounding health EXCEPT for biotechnology companies. With the increasing need of everyday healthcare, more companies are popping up and, for better or worse, the industry is steadily growing.
Large Public Companies in the Sector
UnitedHealth (Ticker: $UNH) - Market Cap: $482.9B
CVS Health (Ticker: $CVS) - Market Cap: $130.5B
Elevance Health (Ticker: $ELV) - Market Cap: $115.6B

Opportunities for Broad Exposure
There are plenty of opportunities to get broad exposure to this industry. One of the highest rated for 2022 is the iShares U.S. Healthcare ETF. You can find out more about this ETF here.

Key Metrics and Considerations
Consistent Profit: There has been a recent push in healthcare spending and healthcare companies have been benefitting. I’m looking for a constant increase and a recent jump in profit. The COVID-19 pandemic might have hurt some companies initially, but I’m looking at healthcare companies to recover faster than most industries.
Moat: I’m going to define moat slightly differently for the healthcare industry. A moat in the healthcare industry might be large corporate clients (health insurance companies), offering a certain product that is a necessity, or a large retail footprint. Corporations rarely switch insurance providers, if there are doctors, products, or services that are in a certain geographical location as long as that area is sustained, and lastly if there is a large retail footprint people will go. People are creators of habit and will not change those habits as long as there is not a dire necessity.
Sustainability: This is similar to the first two metrics but if there is a moat and consistent profit there needs to be a way for the company to sustain that. The sustainability can be cash reserves, development of new products in that same area with the moat, or something else that I am not currently thinking of. Generally speaking, there will not be too many large increases in these healthcare companies. There needs to be steady and sustainable growth for your investment to be considered good in this sector.

Opinion of Sector
The healthcare industry is one I’ve had a tough time figuring out. There always seems to be healthcare and biotech companies that explode for a day or two when there is some big news, whether it is FDA approval of studies or positive results of studies, etc. Personally, I am staying away from this sector unless it is a potential big retailer (i.e. CVS, not financial advice and I do not currently own) because I believe there are so many factors and it is not an industry I understand fully. It seems like there has been a massive push with government spending and people worrying about their health, so although I’m tentative to actually get in this industry I am bullish on the sector.

For the full article check it out here
I try to think about my portfolio in terms of the strategy I had in mind at the beginning of the year. On 1/3/22, I had large positions in Cathie Wood stocks like $TDOC, $COIN, and $TWLO. We all know what happened to Cathie’s stocks. They have been the worst performers. COIN being the worst, down 70%. I still hold them, however. I haven’t completely lost faith.

Earlier in the year, I stated that I wanted to build heavier positions in MSFT, GOOG, and META because I did not think they would be affected as much by the economic downturn. I did indeed build up heavier positions in $MSFT, $GOOG, and $META as can be seen on the chart. META would be in a higher position but is down significantly on the year. I do believe that META is attractively priced right now.

Another thing I mentioned earlier in the year is how I was heavy in ecommerce and fintech. My ecom and fintech holdings are down significantly. I haven’t sold, still holding on. I am slowly accumulating. $ETSY and $UPST are some of my favorites for these areas. Also, like $RVLV.

I did add what I consider to be safer positions to my portfolio in an effort to preserve value. These types of additions included $UPS, $UNH, and $CNC. I am either up a little or down a little on these. They’ve done the job I’ve asked of them.

Back in January, I also said I would slowly keep buying Chinese stocks. Interestingly, these are my best performers for the year. $FUTU up 38%. $VIPS up 19%. $PDD up 27%.

A few weeks ago or so, I did some panic trading. It was hard to think clearly with all the down days. I was in and out of a few stocks over a period of a few days. I’m at a better place mentally now. I’m going to stick to my convictions. Will my strategy work? I don’t know, but I’m enjoying the process of learning and growing as an investor. Green days inspire hope. Red days are instructive and build discipline.
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Abilash Satya's avatar
$16.8m follower assets
In Bear market or not ?
With bear market news around the corner, I dipped into the charts of S&P 500 'Top 10' stocks to check on their current levels. Here are the insights :

  • Current Top 10 S&P stocks by weight (in the order )
( My watchlist had $JPM as 10th entry. It has been replaced with $UNH. Any thoughts ?)

  • 8 out of 10 stocks are under 50SMA and 200SMA on daily charts except for $BRK.B and $UNH which are just touching 200MA.

  • However, on weekly charts, I see 6 out of 10 stocks between 50SMA and 200SMA. 2 stocks above 50SMA and 200SMA. And the last 2 , $AMZN and $FB crossed below 200SMA.

With looming food shortage , spiked gas prices , ongoing war , inflation , housing market potentially entering correction , hiring freeze from companies etc.. more drawdown of S&P 500 index expected ?

I am trying to find information to see if i have to rebalance some of the funds to have more bond exposure. I am planning to go 100% SPY index when we flatten out and start showing some strengths in the months to come.
The Weekend Edition # 38
Hi all, I hope you're having a great long weekend.
This week on the Weekend Edition

Market Recap
Sector Focus - The Airlines $JETS
Earnings Quotes - $JPM, $BLK, $UNH, $DAL;
Economic & Earnings Calendar

Stocks patterns post Earnings - Week April 11th
The earnings season starts this week! Here are the reports I will look into and how the stocks performed historically, 1 day after the earnings release.

My favorite earning plays this week are $MS and $BLK.

JP Morgan $JPM - April 13th before the open
1-day performance in the past 12 quarters:
  • Average returns = -0.6% 🔴
  • Average price move = + / - 2.4%
  • % of positive returns = 42% 🔴

Blackrock $BLK - April 13th before the open
1-day performance in the past 12 quarters:
  • Average returns = +1.2% 🟢
  • Average price move = + / - 2.9%
  • % of positive returns = 67% 🟢

Delta Air Lines $DAL - Apr 13th before the open
1-day performance in the past 12 quarters:
  • Average returns = -0.8% 🔴
  • Average price move = + / - 2.5%
  • % of positive returns = 42% 🔴

Fastenal $FAST - April 13th before the open
1-day performance in the past 12 quarters:
  • Average returns = +1.4% 🟢
  • Average price move = + / - 4.0%
  • % of positive returns = 42% 🔴

Bed Bath & Beyond $BBBY - Apr 13th before the open
1-day performance in the past 12 quarters:
  • Average returns = -3.0%🔴
  • Average price move = +/- 14%⚠️
  • % of positive returns = 42%🔴

Morgan Stanley $MS - April 14th before the open
1-day performance in the past 12 quarters:
  • Average returns = +1.5% 🟢
  • Average price move = + / - 2.0%
  • % of positive returns = 75% 🟢

Goldman Sachs $GS - April 14th before the open
1-day performance in the past 12 quarters:
  • Average returns = -0.4% 🔴
  • Average price move = + / - 2.0%
  • % of positive returns = 58% 🟢

United Health $UNH - April 14th before the open
1-day performance in the past 12 quarters:
  • Average returns = +1.1% 🟢
  • Average price move = + / - 3.0%
  • % of positive returns = 58% 🟢

Wells Fargo $WFC - April 14th before the open
1-day performance in the past 12 quarters:
  • Average returns = -1.7% 🔴
  • Average price move = + / - 4%
  • % of positive returns = 33% 🔴

Citigroup $C - April 14th before the open
1-day performance in the past 12 quarters:
  • Average returns = -1.6% 🔴
  • Average price move = + / - 2.3%
  • % of positive returns = 25% 🔴
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The Most Important News in Special Situations This Week
  • It’s the season for annual general meetings and several high-profile proxy fights are ongoing. US Foods $USFD appointed two new directors to the board amid a fight with Sachem Head. Kohl’s $KSS criticized Macellum as its sale process with Goldman Sachs continues. Guess $GES is facing a fight with Legion Partners and Ventas $VTR with Land & Buildings.

  • Hasbro $HAS turned down a settlement offer from Alta Fox in their ongoing proxy contest. Alta Fox’s Connor Haley told Yahoo, "It would not surprise me at all if somebody came around and said look, we're gonna bid for the whole company in a hostile way.”


  • An increase in investor activism campaigns is perhaps best epitomized by Carl Icahn, who is waging simultaneous proxy contests at Kroger $KR, McDonald's $MCD and Southwest Gas $SWX. Previously in Q1, Icahn announced settlement agreements w/ Delek $DK and Dana $DAN.


  • Global M&A fell to the tune of double digits in the first quarter, but 90% of the drop in domestic deal volume was attributable to a decrease in SPAC merger activity (see graph below). Evolving dynamics have created pockets of high activity, like in community banks, UK-based companies, real estate, and gaming.

  • Nielsen $NLSN announced its sale to Elliott Management (Evergreen Coast Capital) & Brookfield Business Partners $BBU in a $16bn transaction ($28 / share). Nielsen had previously rejected a $25.40 / share offer and announced a share buyback.

  • M&A is active in the UK: Ted Baker $TED.L rejected two takeover bids by Sycamore (Sycamore has until April 15th to submit a revised proposal) and a second activist investor has emerged in their stock. Pearson $PSO rejected a third proposal from Apollo $APO, ending the private equity firm’s pursuit.


  • Schweitzer-Mauduit $SWM announced an all-stock merger of equals with Neenah $NP, creating a leader in specialty materials. Interestingly, both companies first emerged as public companies by spin-offs from Kimberly-Clark $KMB.

  • UnitedHealth $UNH announced the acquisition of LHC Group $LHCG for $6.4bn. The deal comes amid regulatory concerns regarding UnitedHealth’s pending acquisition of Change Healthcare $CHNG.


  • Busy week in community bank M&A activity with 4 deals: Apollo / Seacoast $SBCF, Bank of Jackson Hole / National Bank Holdings $NBHC, Charter Bankshares / Nicolet $NCBS and Randolph Bancorp $RNDB / Hometown Financial.

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The $HAS stuff is really interesting. I have a smaller, slightly more speculative, position in $HAS. I believe that despite the board snuffing the proposal (which was shocking), the investor base is going to be woken up and question that decision.

Adirondack Retirement Specialists, a Meaningful Shareholder of Hasbro, had the following statement:

"We were dismayed to see media reports indicating that the current Board of Directors rejected what appears to be a step forward toward adding value for Hasbro shareholders via a very reasonable settlement proposal from Alta Fox. If true, it is troubling to us that the current directors would reject a well-researched 2.5% shareholder’s input and candidates who have records of adding value at a time when Hasbro seems to have lost the market’s confidence. The Company’s shares are at a new 52-week low point, and it has a strategy that has led the business to lag the overall market and its major competitor over the past five years. For shareholders, we insist on a strategy that prioritizes the highest and best long-term allocation of capital and resources. In our view, Alta Fox’s proposal takes shareholders toward that goal. We intend to support the entire dissident slate as we believe that would be in the best long-term interests of shareholders if a contested vote is held at the 2022 Annual Meeting of Shareholders."
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