by Ian Harvey
January 15, 2019
UnitedHealth Group Inc. (NYSE:UNH)
UnitedHealth Group climbed 3.55% to close at $256.87 overcoming early weakness on the heels of its fourth-quarter earnings. UNH held its 2019 outlook in place, as Optum revenues topped $100 billion for the first time on record last year.
And “Earnings Predictions Members”, taking a call option, realized 84% potential profit on the day; and more could be expected.
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
The Details Presented Previously……..
UnitedHealth Group Inc. (NYSE:UNH), a leader in health
insurance for years, will report earnings before the market opens. The
consensus earnings estimate is $3.22 per share on revenue of $57.94 billion.
Consensus estimates are for year-over-year earnings growth of 24.32% with
revenue increasing by 11.29%.
UnitedHealth Group has one of the best charts on the Street, beating
every quarter for the last 10 years. Over the last two years, shares are up 50%
versus the S&P 500 return of just 13%.
Revenue growth at both UnitedHealthcare and Optum segments along with
membership strength is expected to boost the company's fourth-quarter results.
For the company's UnitedHealthcare segment, expect revenue rise from an
increasing number of people served, greater membership growth in higher acuity
programs coupled with higher pricing to cover expected medical cost trends and
resumption of the health insurance tax for 2018.
Also, expect Optum, the company's health service business, to be a
significant catalyst for its earnings. Optum's sub-segment Optum Health's
earnings are anticipated to be driven by growth in care delivery, and behavioral,
digital consumer engagement and health financial services while its sub-segment
OptumInsight's revenues are expected to be bumped up by an expansion in payer
technology and services plus care provider advisory services.
The company's solid membership can be attributed to rise in Medicaid and
Medicare Advantage enrollments.
Overall earnings estimates have been revised higher since the company's
last earnings release.
One investment analyst has rated the stock with a hold rating and twenty-two have assigned a buy rating to the company. UnitedHealth Group presently has a consensus rating of “Buy” and an average target price of $294.20.
Option trade to consider: Buy the UNH FEB 15 2019 260.000 CALL at approximately $2.90.
The Earnings Report…..
UnitedHealth had a good 2018, and so far it’s riding that wave into 2019
as well with its fourth-quarter-earnings report.
The nation’s largest insurer said it earned $3.28 a share on revenue of $58.42 billion, while analysts were looking for EPS of $3.22 on revenue of $58.01 billion. Total revenue rose about 12 percent to $58.42 billion in the quarter, topping Wall Street forecasts of $58.01 billion.
At first, the shares were lower, perhaps as investors were hoping UnitedHealth would raise its 2019 outlook closer to analysts’ expectations. As well, the company said that its operating-cost ratio rose 40 basis points to 15.1%, due to the return of the health-insurance tax.
UnitedHealth maintained its previous profit forecast for 2019 adjusted earnings of $14.40 to $14.70 per share, and said higher than expected medical costs in the fourth quarter were limited to states for which it manages their Medicaid benefits, the government program for low income Americans.
The Result So Far………
Year to date, UnitedHealth is up 6.7% since the start of the year,
easily outpacing the Health Care Select Sector SPDR ETF (XLV)’s 1.7% climb.
Leerink’s Ana Gupte reiterated an Outperform rating on the stock and a
$335 price target following the report. She writes that UnitedHealth turned in
a “solid top- and bottom-line beat.”
As for guidance, she anticipates that the company will start to deliver
beat-and-raise quarters beginning with its next report, on the back of organic
growth catalysts, along with its acquisition of DaVita’s (DVA) DaVita Medical
Group. Even after that deal, she notes that UnitedHealth still has as much as
$8 billion in free cash flow to make additional deals, pay down debt, and
support its dividend.
UnitedHealth has been a steady outperformer in recent years. The company
has turned in a number of upbeat quarters, and analysts are enthusiastic about
its Optum health-services business, which some see as the company’s answer to
tech pushing further and further into the healthcare space.
So, for “Earnings Predictions Members”, who managed to execute this trade recommended by Stock Options Made Easy; potential profits of 84% were available at the time.
Entering the option trade at a cost of $2.80 or less on Monday; and the price of the option reaching $5.14 on Tuesday (and at close was still near the $5.00 mark); a potential profit of 84% was made. Therefore, one options contract would provide a profit of $234.00.
A NICE START TO THE WEEK!
AS ALWAYS THE DECISION IS YOURS!
As you would have by now realized, some of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, which is obvious that it does apply in this case; and during earnings season this strategy of predicting earnings has been very profitable.
Sometimes it is our approach to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use – such as found with the “Earnings Predictions Program”. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!
Strategies to Consider……
When To Exit A Trade Based On Earnings?.....Read Article
"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.……continue reading this article……
Our proven track record says it all!!
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