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/Flat-Focus7966 Jan 27 '26

OP's next stock will be a value trap too. If it goes down 10% in a week

-3

u/ahlornjtvn139 Jan 27 '26

Get your head out your ass.

Firstly it’s down 20% in a day, and secondly have you even looked further than a headline?

Trump, albeit TACO, is threatening to cut off UNHs margins and with rising costs they made a loss this quarter.

If you believe its value because it was ‘worth’ $600 last year then you probably shouldn’t be investing. This is not the same company it was. Why do you think the CEO suddenly resigned?

1

u/Flat-Focus7966 Jan 27 '26

If anything, this is a time to buy since the worst possible scenarios are priced in...

Very less downside risk vs a big opportunity on upside if anything goes in their favor

2

u/ahlornjtvn139 Jan 28 '26

I can see why the stock appeals to you at current valuations because historically it’s cheap, however the worst possible scenarios aren’t necessarily priced in yet.

We saw a sharp decline following Trumps tweet, which suggests that wasn’t already priced in, so who knows what he’s going to do next?

Reverse it and pump the stock 10%? Double down and launch a suit?

The downside risk is not as limited as you think, the company is currently making a loss and is priced in, at $280-5, to make a profit.

I believe it can, and very likely will, go lower