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TheDumbMoney (44.11)

Updated Thoughts on United Health Group, Inc.

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May 04, 2013 – Comments (5) | RELATED TICKERS: UNH , HUM

Evaluating a long-time holding, I think UNH is a big buy at under $54/share, and a sell in the $80s.  It is presently at around $58/share.  It's a powerful company that generates $6 billion in free cash flow anually, reduces its share count regularly, and has big advantages as a large company in a highly-regulated industry.  Here is my full analysis.

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5 Comments – Post Your Own

#1) On May 04, 2013 at 8:18 PM, HarryCarysGhost (99.70) wrote:

. Evaluating a long-time holding, I think UNH is a big buy at under $54/share, and a sell in the $80s

 Why sell @80?

If your digging on the stock, why not reinvest the dividends in one form or another, while holding on to your low cost basis?

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#2) On May 05, 2013 at 5:17 PM, TheDumbMoney (44.13) wrote:

Hi Harry, per the spreadsheet I linked to in that analyis, at a bit over $80/share the company would in my humble view be more than 20% overvalued.  As you know, I'm a buy-and-hold guy, but I follow a rule that if in my best estimate a stock is 20% overvalued, I sell it and look for a better idea.  And this stock I own in my IRA, where I pay no taxes on a sale, and no commissions.  Have a nice weekend, what's left of it.

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#3) On May 05, 2013 at 6:58 PM, chk999 (99.97) wrote:

I think being one of the biggest players in the industry is a huge strength. As more and more regulation comes into healthcare, it favors the biggest companies that can afford to have a compliance department to keep track of all the rules. It will become uneconomical for the smallest companies to try to obey all the rules. So I see more consolidation in this industry with UNH being one of the ones that benefits from it.

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#4) On May 05, 2013 at 7:40 PM, HarryCarysGhost (99.70) wrote:

Doh!!!

Sorry about that, the link answered my question perfectly...

Moving along...

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#5) On May 06, 2013 at 2:25 PM, TheDumbMoney (44.13) wrote:

chk999, that is a major component of my thesis, and I agree with you entirely.  Regulation favors the large.  My only question is whether one of the other biggies like Humana is even better than UNH.

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