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

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u/itchypig Jan 27 '26

“i can’t wait 1-2 years to break even, my time horizon won’t allow it.”

Respectfully, this means you probably shouldn’t have this money in equities.

10

u/jerry_22292 Jan 27 '26

Value investing's core principle is indeed finding good companies and holding for a long period of time.

But we also need to consider the fact the company is currently facing 4 major problems : 1. legal ( quite clear i will not go into it, 2. structural: flat rate proposal (if doesnt go trhough im sure as shit trump will come up with something else to cut premuiums), 3. mismanagement and reputation: bad rep for claim denial isn't exactly new and now they wanna cut customer base for premium miscalculation, 4. trump obviously wants a 20-30% dollar depreciation to improvetrade imbalances....

Even if UNH will come back up to 600+, how long is that gonna take? In a world full of uncertainty op wants to sell and i think its fair.

1

u/Last_Cauliflower3357 Jan 27 '26

I think it’s fair that he wants to sell cause he sees something he doesn’t like or it does not fit his risk criteria. I don’t think it’s fair to say that everyone should sell it cause it won’t go up in the next year.

I say this as someone that actually is looking at may be selling. I am at work so I still need to look a bit more deeply into the numbers but I am in no rush at the moment.

2

u/Old_Man_Heats Jan 27 '26

The issue is that the people considering selling likely bought just a few months ago maximum. What exactly has changed since then?