UNH is a Value Trap

AI Summary

Author argues UNH is a value trap with deteriorating fundamentals and models $232 fair value.

UNH — AVOID Author argues UnitedHealth is a value trap due to a ~91% medical cost ratio, shrinking customer base below 3 million, negative Optum growth with backlog down $1.2 billion, and a jump in days claims payable that he sees as accounting games. He expects the stock could hit $200 by end of year and computes a DCF fair value of $232.

UNH is a Value Trap

Unless you are going to hold for 5 years + then this stock is toast. Genuinely could hit $200 by end of year, please do not hold your bags just get out while you still can.

Score 140

Comments 234

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u/ahlornjtvn139 Reddit r/ValueInvesting

UNH value trap with deteriorating fundamentals

Author argues UnitedHealth is a value trap due to a ~91% medical cost ratio, shrinking customer base below 3 million, negative Optum growth with backlog down $1.2 billion, and a jump in days claims payable that he sees as accounting games. He expects the stock could hit $200 by end of year and computes a DCF fair value of $232.

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