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UnitedHealth UNH Stock Analysis – How big can the numbers be?

UnitedHealth UNH Stock Analysis:

UnitedHealth Group Inc. is an American profit managed health care company based in Minnetonka, Minnesota. UnitedHealth Group falls into the health care industry, one of the world’s largest and fastest-growing industries. Health care industry comprises more than 10% of GDP of most developed countries, forming usually a significant part of a country’s economy.

UnitedHealth Group Inc. serves more than 130 million customers all over the globe and has invested in various sectors of health and technology. Its aggressive partnerships have enabled them to grow exponentially the last years and the company promises presence and preservation in the top rankings of lists such as Fortune 500 (currently holding 6th position), with revenues reaching almost $185 billion.

So now let’s use IDDA for UnitedHealth UNH stock to see if it can fit in your investment portfolio. Let’s start with the first IDDA point, the fundamentals.

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1- Fundamental Points: UnitedHealth UNH Stock

Who are they?

UnitedHealth Group, Inc. provides health care coverage, software and data consultancy services. It is giant health insurance company. Its four main segments are:

  • UnitedHealthcare
  • OptumHealth
  • OptumInsight
  • OptumRx

 

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The role of Optum, in general, is to provide information to decision-making people of the firm, help them improve the quality of services and provide the company with competitive advantage by integrating technology in healthcare. UnitedHealthcare provides health benefit plans and services to employers, individuals, the community, retired individuals, and people overseas. The company has come through a series of buying and selling other companies, showing a very active and successful M&A history. Actually, the most recent transaction took place in February 2017, with UnitedHealth acquiring Rally Health Inc.

Over 230,000 employees work and benefit under the UnitedHealth umbrella. The company has a 23 history of presence on Fortune 500 List, promising many more successful years to come. Mr. David S. Wichmann serves as the company’s CEO and Mr. John F. Rex serves as CFO. UnitedHealth’s top competitors are McKesson, a huge drug distributor, ranking #5 on the Fortune 500 list and CVS, the pharmaceutics chain, ranking #7 on the same list.

 

Discover the Top 7 Stocks that Kiana Prefers to UnitedHealth Group

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Capital points

UnitedHealth UNH stock
Price as of 11/22 $ 211.22
52 Wk Range $ 150.00 – $ 213.93
Shares Outstanding 969.07 million
Market Cap $ 204.686 billion
Beta 0.50
P/E (TTM) 24.02
P/B (MRQ) 4.42
Gross Profit (2016) $ 67.8 billion
ROE 19.8%
Diluted EPS 8.81
Total Debt/Equity (MRQ) 59.14

 

UnitedHealth has a total debt of almost $30 billion, but generates enough cash ($7 billion last year) to relieve its investors out of any anxiety that debt spreads along with its name and presence. The stock’s beta indicates that it is moderately correlated with market’s ups and downs, and seems reasonable, since the health care industry is not that much affected by crises, uptrends and downtrends. The return on equity for UnitedHealth shareholders reached almost 20% for this year. There are some strong financials for this company, supporting its claim on remaining on the top 500 American companies.

 

This brings us to the second point of the IDDA,  technical analysis.

2- Technical Points: UnitedHealth UNH Stock Analysis

Monthly: We can observe a bullish engulfing pattern for the last day of the chart, with a very long bullish candle after a very short bearish one. In the period of 2008-2009, the company apparently was negatively affected due to the global financial crisis and we can observe a downtrend during this period. Interestingly, from mid 2010 until now the stock has experienced more than 550% increase in its price, with an overall uptrend being noticed throughout the period 2010-2017.

UnitedHealth UNH Stock Analysis - Monthly Chart Ichimoku Fibonacci Setup

UnitedHealth UNH Stock Analysis – Monthly Chart Ichimoku Fibonacci Setup

 

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3- Market Sentiment

By nature, and by timing, healthcare and technology industries promise a lot in both the short-term and long-term future. Robots are already integrated in surgeries, providing enormous help to doctors. Data analytics contributes to structuring and formatting data, presenting the information to the decision maker in a more efficient way. Huge amounts of money are invested in these industries and almost everyone of us will eventually interact with them. Others become doctors, or physiotherapists, or dentists, or just clients due to a flu or anything more serious.

UnitedHealth UNH Stock Analysis - 4-hour Chart Ichimoku Fibonacci Setup

UnitedHealth UNH Stock Analysis – 4-hour Chart Ichimoku Fibonacci Setup

So the sentiment here is that a company such as UnitedHealth UNH will remain in a prevailing position in the global markets, and it will continue performing greatly. The question is how much margin there is for an increase in its price, but as we have seen from the past, the 550% price increase was not random. We will not be surprised if this number grows more in the future. By observing the short-term charts, the UnitedHealth UNH stock has been moving under the resistance level for a long time, not being able to surpass it, trading above the Ichimoku cloud.  It can also be observed that there is a resistance level at $213 and a support level at $199, and a possible second support level at $192, if the price drops below the first pivot level of $199.

 

UnitedHealth UNH Stock Analysis – Investing Strategy

As the 4th point of the IDDA, you must calculate your risk tolerance before deciding on the investment strategy that is suitable for your portfolio. Join us for a free MasterClass to learn more.

 

For further help with your portfolio development, and if you want to chat with Kiana regarding your investments, join our investing group here. It’s so fun and you will learn a ton!

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Happy Hunting!

Anthony Pistikos

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