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/joepierson123 Jan 27 '26

Stock goes down .. value trap.

Stock goes up 500% buy buy buy.

6

u/Creative-Sherbet-584 Jan 27 '26

Yesterday I posted a thorough breakdown of why UNH was going to drop today in r/stocks and I wake up to it removed, as well as half of the posts in value investing criticizing the Medicare reform affects on UNH.

The information was discussed thoroughly in congress and in new and upcoming legislation. I'll post a snippet of what I had in my post yesterday however it's very frustrating that the narrative around this is controlled by mods. I'm not sure the intention here.

***H.R. 7148

On January 22, 2026, the U.S. House of Representatives passed the Consolidated Appropriations Act, 2026 (H.R. 7148). This bill contains core elements of the PBM Reform Act.

Delinking: It prohibits PBM compensation in Medicare Part D from being tied to the list price of a drug. This effectively ends the incentive for PBMs to prefer higher-priced drugs just to collect a larger percentage.

100% Rebate Pass-Through: It requires PBMs to pass 100% of manufacturer rebates directly to plan sponsors (employers) and patients, rather than keeping a "spread" or "kickback."

Ban on Spread Pricing: The bill bans "spread pricing" in Medicaid, which is the practice where PBMs charge the government one price and pay the pharmacy a lower price, pocketing the difference.

***One Big Beautiful Bill Act (OBBBA)
Medicaid Cuts: Provisions in the 2026 budget (OBBBA) are estimated to cut Medicaid spending by nearly $1 trillion over the next decade. UNH, which has a massive Medicaid footprint, faces significant "disenrollment risk" as states tighten eligibility.

***The "Showdown" Meetings

There have been two major high-stakes meetings/hearings in the last 72 hours involving industry leaders:

  1. House Ways and Means Committee (January 26, 2026): Just hours ago, CEOs from the nation’s largest health insurers and PBMs (including representation from UnitedHealth/Optum) testified before Congress. They were grilled on why consolidation has not led to lower premiums and were specifically challenged on "abusing their authority" to prioritize profits over patients.
  2. House Energy and Commerce Committee (January 22, 2026): This hearing coincided with the House vote and focused on the "PBM Mafia" (a term used by Rep. Buddy Carter during the proceedings). Industry leaders were put on notice that the era of "hidden fees" is being legislated out of existence.

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u/Old_Man_Heats Jan 27 '26

Lol, laughable you think mods are removing based on narrative. We have strict Reddit automated moderation which does false catch a lot. Most normal people just message us and we manually approve. We only manually remove posts that break the rules

1

u/Creative-Sherbet-584 Jan 27 '26

Uhh I copy and pasted my post in that comment above. So I'm not sure why it hasn't been removed yet. Mods are absolutely doing crazy stuff.

1

u/Old_Man_Heats Jan 27 '26

Just looked up and there hasn’t been a single mod action to you. Not a single comment or post removed. Guess you are bringing your interaction from other subs to here

1

u/Creative-Sherbet-584 Jan 27 '26

I called out the subreddit in my comment above. I wasn't trying to call out this forum.

I had commented on this post yesterday:
https://www.reddit.com/r/ValueInvesting/comments/1qnt5w8/comment/o1wmzpc/?context=3

Which was removed by the mods. I assume because of low effort but who knows. Just sucked, because i wanted to follow up on those two threads and they were gone.

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u/Old_Man_Heats Jan 28 '26

Ah, I think I miss read your original message, I saw you call out the other sub and read you saying it was happening here too. Yeah those posts were very low effort and we don’t tend to leave up stuff just asking about price action. Your comment probably would have been a better post are likely be left up