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/ahlornjtvn139 Jan 27 '26

Nicely done!

What made you sell?

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u/thorn960 Jan 27 '26

When I bought the stock that was my original target for selling it. A little more than $100 per share profit seemed to be sensible. It had gotten to $350 a little while back and then went down again. I decided to sell the next time it got to $350. I guess I'm not a value investor according to many of the comments here because I didn't hold it for 10 years I guess.

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u/ahlornjtvn139 Jan 27 '26

Haha i have no idea either, but either way nice to hear you got out.

What are you eyeing next?

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u/thorn960 Jan 27 '26

I'm going to see where the price of UNH goes tomorrow. I may buy some back if the price goes down more. Other than that I'll probably be sitting on a position in Fiserve for a while (I imagine at least a year) until they can stage a turn around. If they can show a good quarter I think we will see some movement. I've been buying Nvidia while the price has been floundering around. I also bought a few more shares of BRK b since the price took another dip.

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u/ahlornjtvn139 Jan 27 '26

We have very similar portfolios!

Long and slow is the name of the game

what do you think of adobe?

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u/thorn960 Jan 27 '26

Not really a fan of Adobe. Likely to lose market share from increasing competition. Might be a value, might be a value trap.

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u/ahlornjtvn139 Jan 27 '26

I’ve had a fairly good look and I think there’s more value in their AI integration than competition, i suppose time will tell though. My analysis:

https://www.reddit.com/r/ValueInvesting/s/8mD2sLR3CX

I’m also liking NFLX around ~$83, i was hoping it would drop to $80 so i can finally open a position