UNH
There down for a lot of reasons let me recap.
1) They missed expectations and lowered guidance.
2) We get the executive order from trump, which is going after the middle man so to speak. The middle man is CI, UNH, and CVS. Now I don't think this will turn out as bad as the market feared that day, but another potential headwind to the companies that have big PBM's buried in there business.
3) Basically a month later after earnings they pull guidance and CEO left. Which might be okay considering how it is being run. but still one month later and guidance needs to be completely pulled and the CEO left. no matter how you slice it that isn't a positive.
4) Today was the best of all criminal charges being possibly filed on UNH, if convicted they cannot I believe they can't do federal programs for 5 years, I think I heard that on the TV (at least that was my understanding). They have a ton of government exposure obviously. Maybe nothing comes of it, but that is a major problem, and with this hanging over them how much market share are they gonna lose because of this, with people going with the CNC,ELV,CI,CVS,HUM over them for the simple reason they don't have this overhang.
Maybe I'm being overly negative but to me the stock is down for good reason with all these unknowns, keep in mind UNH traded at a huge premium on the Multiple to other stocks in the sectors with in some case 3-10 more times on the multiple. after this if anything they should trade at a discount, not a premium. And lets face it CNC is trading at 7, ELV is trading at 9 and CI is trading at what less than 9x next years earnings, the sector has been destroyed. they all near 52 week lows just about, but if that is the case call me nuts why not buy the ones with lower valuations and are getting hit after either reaffirming/raising guidance, versus a company whose CEO left, the company cut guidance twice, might still trade at a premium to the other in the sector, and is getting brought up on possible criminal charges which could be a disaster if this becomes any part in reality. For disclosure I own CNC, and ELV, and think the sector is very attractive I just rather go with other players at this point. All is just my opinion, and I could always be wrong though.
AI
