UnitedHealth Group Incorporated (UNH): An Overrated Stock Poised to Drop

On December 03, 2019, UnitedHealth Group Incorporated (NYSE:UNH) shares lost -0.99% or -2.76 points to close at $276.9 with a thin trading volume of 3.239 million shares. It opened the trading session at $276.97, the shares rose to $278.42 and dropped to $273.85, the range by which the price of stock traded the whole day. The company now has a market cap of $263 billion and currently has 950.12 million outstanding shares. UnitedHealth Group Incorporated (UNH) stock has accumulated 9.79 percent of market value in 21 trading days.

UNH stock’s trailing 3-year beta is 0.64, meaning there will be a lower rate of return, although posing a lower risk. The part of a firm’s profit given to each outstanding share of regular stock was $13.75 share in the trailing 52 weeks. The stock’s value surged 11.15 percent year to date (YTD) compared to a decline of -1.59 percent in 52 week’s period. The firm’s shares are still trading -3.83 percent below its 1-year high of $287.94 and 33.08 percent up from 52-week low of $208.07. The average consensus ranking on the company is 1.8, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a buy.

UnitedHealth Group Incorporated (UNH) is most likely going to rise 5.25 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $335-month high price target. This represents a whopping 20.98 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $295, which means a return possibility of 6.54 percent in comparison with the closing price of the stock of $276.9 on December 03. The lowest price set for the stock is $245 — just above -11.52 percent from UNH share price now.

Past records have indicated that shares in UnitedHealth Group Incorporated rose on 20 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of UNH’s Q4 earnings on January 15. Analysts are predicting revenue to climb 5.2 percent to $61.5B in the financial fourth quarter, while EPS will soar by about 14.33 percent to $3.75 per share. In the last quarter, it earnings of $3.6 per share came worse than the $3.762, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $60.35B, topping the $59.84B analysts had expected. Earnings are seen to rise by 28.3 percent this year, 10.02 percent in the coming year and the trend continues by 13.38 percent every year in the next 5 years.

Let’s take a glimpse at some insider activity at UnitedHealth Group Incorporated (NYSE:UNH) and observe the pattern. The earliest insider trade happened on 11/18/2019. WILSON D ELLEN parted with a total of 7.4 thousand shares of the firm at average share price of $273.86. The total amount for the sale was set at $2.03 million. On completing this exchange, the Executive Vice President account balance was 50.01 thousand shares. The stock grew 1.11 percent from that insider sale. On 11/07/2019, ROOS THOMAS E, Chief Accounting Officer, did a sale of 1.18 thousand shares at a price of $255.04 per share. This got rid of 300.18 thousand shares from the insider’s fortune and the stock experienced a 8.57 percent rally in price since the news became public. This exchange saw 21.69 thousand shares get out from the Chief Accounting Officer account.

On 10/16/2019, Director BURKE RICHARD T recorded a sale transaction valued at $5.91 million. The sale at $236.56 a share has eliminated 25 thousand shares from the insider’s portfolio position. Meanwhile, shares price witnessed 17.05 percent increase since the transaction reporting date. The company insider is left with 1.7 million shares remaining in the account. BURKE RICHARD T, who works as Director at the company, performed a sale of 5 thousand shares in a transaction worth $1.17 million. The disposal recorded on 09/20/2019 was priced at $233.8 per share. The stock price soared 18.43 percent since the transaction. BURKE RICHARD T currently holds a stake of 1.72 million in UNH stock which is worth $476.4 million after the insider selling.

The stock is lingering around the initial support level of $274.36. After this, the following support is at the zone of $271.82. Up until the time the UNH stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 71.77 on the daily chart, and this may be a cause for concern. In case the price goes below $271.82 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $278.93 level may cause a pull-back move approaching $280.96 mark.

UnitedHealth Group Incorporated (UNH) shares are trading at a P/E ratio of 20.1 times earnings posted in the trailing 12 months. The industry UNH deals with has an average P/E of 19. Its P/B ratio is standing at 4.8X compared to the 2.8 industry average. It is additionally sporting a 1.1 on the Price-to-Sales ratio, compared to the industry’s P/S average of 0.7.