United Health Group (UNH) Research Report

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United Health Group (UNH)

Current Price: $56.28 (1/29/13)

Dividend: $0.85

Current Outlook: Positive

Future Outlook: Extreemly Positive

Rating: Strong Buy

Intrinsic Value: $69

Holding Buy Price Target: $52 – $54

Book Value: $30.50

Year EPS Dividend Low   Price Target High Price Target
2011 $4.74 $0.61 $38.20 $52.75
2012 E $5.27 $0.80 $52.00 $59.00
2013 E $5.70 $0.85 $53.00 $65.00
2014 E $6.30 $0.90 $62.00 $77.00
2015 E $7.20 $0.95 $74.00 $95.00
2016 E $8.00 $1.00 $95.00 $110.00
2017 E $8.50 $1.25 $110.00 $130.00

Recommended Trading Strategy:

Buy long UNH shares in blocks of 100 & go short out of the money 2014/2015 calls with a premium of $5 – $7. Along with current dividend income & above average option premium these shares should generate plausible returns.


Assumed growth rates based on historical data & future perspectives:

Sales Growth: 14% for 3 Years & 5% beyond)

Earnings Growth: 11%

Dividend Growth: 7%


Notes & History:

United Health along with other market participants is trading in the lowest range of P/E, P/S & P/B given their growth rates. ObamaCare & budget cuts are a prime reason for cautious approach to this industry. In my opinion these cautions have already been priced in stocks in this industry. 2013 maybe a challenging year but 2014-2016 are very promising for United. United has replaced Kraft in Dow 30 since October 2012 which has provided liquidity to this stock. Timely cautious investment in this equity can yield above average returns over time.

DISCLAIMER: All of the above forward looking statements have been based off my research from different sources and publicly available information or are my personal opinions. Please do your due diligence before following these reports & these should only be used as a substitute to your research. I may have a position in the above security or may open one in the next 24 hours.

For Personal Use Only!


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