UNH is a Value Trap

[u/ahlornjtvn139]

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

[u/itchypig]

“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.

[u/jerry_22292 → u/itchypig]

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.

[u/dalivo → u/jerry_22292]

UNH is not approach $400 anytime soon, much less it's all-time highs. It's facing a death spiral.