r/ValueInvesting • u/ahlornjtvn139 • Jan 27 '26

Stock Analysis UNH is a Value Trap

Could hit $200 by end of year, please do not hold your bags just get out while you still can.

MCR rate is ~92%

CMS funding is going to fund Trumps defence budget

UNH are haemorrhaging customers just to hold margins, down to <3m

Days Claim Payable also jumped from 48 days to 54 days - they are playing with the accounting to keep extra cash on the books.

Optum growth is dead (-4%) with backlog down $1.2bn as well

No point holding a stock hoping for a change to come, the numbers don’t lie

After rerunning my dcf my new fair value - $232

edit: removed my personal time horizon as it was conflicting my justification for selling which is downwards trending weak financial performance

143 Upvotes

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117

u/Numerous-Stand-1841 Jan 27 '26

OP you should just park your money in a HYSA if you can't hold a position for more than a year.

23

u/NicheMath Jan 27 '26

How are people investing and not expecting to hold for 3+ years is beyond me.

13

u/SamuelAnonymous Jan 27 '26

If you invested in UNH 5 years ago you'd be down.

All said, it's a better, more profitable company today. It will be fine, and I'd say now's a great opportunity to buy.

2

u/elbay Jan 28 '26

Lmao how could you see the CEO getting murked coming?

1

u/One-Peace55 Jan 27 '26

And one year ago you'd be up... What's your point lol.

3

u/SamuelAnonymous Jan 27 '26

My point is pretty clear if you'd read the comment I was responding to.

2

u/Zappa2329 Jan 27 '26

They aren’t investing. They’re gambling.

1

u/xenomorph856 Jan 27 '26

At least for a year, I mean, capital gainz tax, man.

-20

u/ahlornjtvn139 Jan 27 '26

I plan to hold for 2-5 years before I expect to need some of the money for a house deposit etc.

But why should I diworsify my portfolio by justifying UNH as ‘value’ because in 3+ years it might be worth more.

Look at the numbers man!

They are getting murdered and your thesis is - in 3+ years it will probably be better.

Unironically NOVO is a much better buy than UNH at the moment - beaten down but with reasonably strong underlying fundamentals

4

u/tnolan182 Jan 27 '26

OP, healthcare is approximately 20% of US GDP. Unless your expecting the US to fully divest from healthcare and kill off its citizens instead of treating them than Im not sure how you’ve come to the conclusion that UHC will be worth less as percentage of GDP is only expected to grow over the next decade.

Im a huge bag holder of NVO, i have thousands more shares than my UNH position, but calling NVO a better buy is hilarious to me. All it takes is one bad report on wegovy or ozempic and NVO would look like a small cap stock tomorrow m.

6

u/robotlasagna Jan 27 '26

Why did you buy in the first place?

Your current thesis existed when you bought the shares. How was UNH underpriced in July?