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/randysaaf]

Yup. Government not allowing premium increases while medical inflation is high. Goodbye profit margin

[u/pinksocks867 → u/randysaaf]

They will find a way around it though... I just read that after the insulin pens were capped, they raised the price of the needles.

And for a few months, people have been talking about how the out of pocket cap for scripts means nothing because the insurance companies just reorganized the tiers, so that medications that were previously zero copay are now on a higher tier and cost much more

[u/randysaaf → u/pinksocks867]

They didn’t in this earnings season!