Mike
Long-Term Investor, Technology & Crypto
UnitedHealth's debt has to come down to a manageable $20-30B, which would also cut interest expense, and the institutions, TV contributors and big retail accounts pumping it like the next Nvidia are ignoring that. Health insurance is not going away, but the numbers matter more than the hype. x.comÂ
UnitedHealth's regulatory risk looks too excessive to justify holding it at its valuation, and owning it in the first place was a mistake. x.comÂ
UnitedHealth's model is a conflict of interest, since it owns both the insurer and the doctors and data, which makes it too dark to own. It has been accused of using algorithms to systematically deny care to the elderly and sick to lift profits; as both the largest US employer of doctors and an insurer, the patient loses. The assassination of its CEO showed deep hostility toward that system. A moat built on denying care is not worth owning. x.comÂ
UnitedHealth's earnings visibility, unusually high dividend yield and resumed buybacks make paying under 16x forward earnings not look terrible. Still reasonably confident it is a good place to hide for long-term capital: Hemsley keeps clearing the bar, and UnitedHealth has beaten and raised guidance for three straight quarters. Further derisking remains a risk. x.com x.com x.comÂ
UnitedHealth is exposed as health insurance costs become unaffordable for employers: an industry that lives by price gouging will die by it. US employers face the largest health insurance cost hike since the Affordable Care Act began, with a 25% rise expected in 2027 after a massive drop in exchange enrollment. Employer-based health plans now look set to go the way of pensions and become extinct. x.comÂ
UnitedHealth's rebound still has a Medicaid problem because care costs are outpacing state funding. Q3 operating profit rose to $6.6bn from $4.3bn a year earlier, but Medicaid is still expected to lose money in 2026. x.comÂ
UnitedHealth collects ever-rising US healthcare spending, and its stock has stopped falling. Family plan costs rose 249% in two decades toward $24,000, US spending nears $10,000 a person, and the over-65 population is set to double to two billion by 2050. After earnings fell 59% and 69% in back-to-back quarters and the stock dropped from 606 to 248, it based near 250 for a year, a Weinstein Stage 1, then reclaimed its moving average and pushed above 400. x.com x.com x.com x.comÂ
Elevance Health offers deeper value and better growth than UnitedHealth, Centene and similar insurers, trading at about half UnitedHealth's P/E. It is not a sexy trade. MarketSurge picked up a cup breakout with 28% depth, giving a target of 490-500. x.comÂ
TransDigm's heavy debt load is a massive risk if anything goes wrong. It is levered over 5x EBITDA on the assumption it can grow organic EBITDA 4-6% forever without political pushback. Shareholders such as @PythiaR calling the debt an asset is a sign of extreme sentiment, and the market is underwriting 10 to 20 years out. x.com x.com x.com x.com x.comÂ
UnitedHealth could be a $600 stock over the next three to five years if margins stabilize, a solid return from here, as the market remembers why it has been a strong long-term compounder. It has scale, Optum, insurance exposure and durable cash flow; the stock was hit by medical-cost pressure, regulation and sentiment, but the business still generates a lot of cash. SoFi and ServiceNow offer more upside, with three-year targets of $80+ and $300+. x.com x.comÂ
The healthcare utilization scare is a payer problem, not a provider problem, which leaves HCA Healthcare in a strong position. A day after the market sold off insurers on utilization fears, HCA, the country's biggest hospital chain, said at a Wells Fargo conference that demand is growing and 99% of its book is performing as expected. Exchange admissions fell 15%, but that reflects the subsidy cliff rather than weaker demand for care. x.comÂ
