UNH: Opportunity in Insurance Through Call Spreads and Margin Recovery
"The final one, which is by far the most hated sector, is insurance, and the stock that I own is UNH, United Healthcare. Many of you asked, "What have you done on the dip?" and although I didnt buy the dip, I bought call spreads on UNH for June 2027, which are up about 74%. United Health fell significantly in 2025 due to underestimated medical costs, but they are addressing this by raising prices and exiting unprofitable plans. Their pricing strategy is intensely focused on margin recovery and moving back towards an earnings per share growth target of 13%. With strong cash reserves and a history of significant stock buybacks, I believe 2026 could be an amazing year for UNH."
The speaker presents United Healthcare (UNH) as a contrarian investment in the insurance sector. Despite a significant dip in 2025 driven by cost misestimations, UNH is repositioning itself through price hikes and plan exits to recover margins. The speaker has already capitalized on this by buying call spreads, which have appreciated dramatically, signaling a bullish outlook for 2026 supported by robust fundamentals and potential buybacks.
United Health (UNH): Value Opportunity Amid Market Fear
"United Health is still the leader in healthcare and dominates Medicare Advantage, even after higher-than-expected medical costs and management upheavals"
The speaker highlights United Health as a strong healthcare leader despite recent challenges, emphasizing Buffett's large buying activity and an analyst consensus of 20% upside. The commentary stresses that market fear can create value opportunities for patient, long-term investors.
Buy United Health Group at Attractive Valuation
"So, if Hims and Hers and United Health were trading at the same valuation, Hims and Hers would be the better stock to buy. But they're not trading at the same valuation. The stock market is full of individuals that are savvy and have identified Hims and Hers as one of the excellent growth stocks in the market today and it trades at a premium valuation. By the way, these charts I was getting from fiscal.ai and there's a link in the description. If I was to pick between these two, the valuation makes the biggest difference and I would choose United Health, United Health Group as the better stock to buy right now at the current market prices."
The speaker compares United Health Group and Hims & Hers, ultimately recommending United Health because its valuation is more attractive despite Hims & Hers' higher growth rate. The analysis highlights that UNH is trading at a lower forward PE with an intrinsic value gap, making it a better immediate buy move.
Company Commentary: Caution on United Healthcare as a Potential Value Trap
"First one. United Healthcare. Now this is not one I thought you would know. I don't think either of us has ever have ever ever owned this. People are bullish. Bergkshire is clearly bullish because of the downturn this year in the whole ACA market. And I think you could be walking into a value trap here by saying, "Oh, Buffett bought it." Probably not even him. Berkshire bought it. It's cheap. The healthcare industry is going to just be entrenched forever and ever and ever. And I think you could be walking into picking up some pennies in front of the steamroller."
In this segment, the speaker discusses United Healthcare, cautioning that despite its cheap-looking valuation and bullish endorsements from Berkshire, investors could be buying into a value trap. The commentary centers on structural issues in the healthcare sector and concerns that past performance may not translate into future growth, warning investors against complacency.
UNH: Q4 Seasonality Mean-Reversion Opportunity
"UNH has the strongest overall Q4 seasonality with all three months showing 65% win rate, yet it's dramatically underperforming with a minus 31% year-to-date return. If you're looking for mean reversion with strong seasonal tailwinds, this one stands out. Boom. Put it on a watch list."
The analyst highlights UnitedHealth Group (UNH) as exhibiting strong Q4 seasonality (65% win rate) while underperforming relative to SPY (-31% YTD). This is pitched as a potential mean-reversion trade, suggesting investors add UNH to a watch list for a possible dip-buy opportunity.
Timing the Market with UNH: Waiting for Valuation Imperfections to Clear
"UNH was in free fall until I announced that Buffett had taken a big position, in which case it bounced. The only impediment was the valuation, and when that was removed, he made his move."
The commentary on UnitedHealth Group (UNH) underscores Buffett7s disciplined approach to timing the market. By waiting for valuation imperfections to be corrected before investing, the strategy highlights patience and the importance of a via negativa approach in capital allocation.
Trade Management Strategy for UNH with Sell and Buy Levels
"I took some profits on UNH at 308 and plan to sell at 316. As it comes under 300, I ll start to buy it again."
The speaker details a trade management approach for UNH. The plan involves taking profits at a resistance level of 316 and re-accumulating shares if the price dips below 300, offering a clear actionable strategy despite ongoing concerns like a DOJ investigation.