Macro Warning on Rate Cuts and Liquidity Illusions
"Rate cuts make people feel smart. They see stocks go up. They think it's them. It's not. It's liquidity. The Fed isn't cutting because things are great. They're cutting because something's breaking. You just haven't felt it yet. Most people treat rate cuts like free money. Lower borrowing costs, more expansion, bullish momentum. All true. But they forget why rates get cut in the first place. You don't inject morphine into a healthy patient. You do it because something hurts, something deep, something you're trying not to talk about."
The speaker warns that rate cuts are not a sign of a healthy economy, but a reaction to underlying problems. Liquidity is mistakenly credited for driving stock gains when in reality, it masks deeper economic issues. This macro commentary implies that investors should be cautious as the easing measures may simply cover up fundamentals that are breaking down.
Buy UnitedHealth Based on DCF Undervaluation
"So, all that being said, do I still think this stock is a buy? Remember, I've had it rated as a buy for several months now. So, let's look at my updated fair value calculation for United Health. So, what you're looking at is my proprietary discounted cash flow valuation model, which values a business and gives me a fair value that I think is a reasonable price to pay. And that price I calculated at $458 for United Health and the current share price is $358. So, it's still meaningfully undervalued according to my calculations. So, I will update my rating for United Health. As I noted earlier, I've had it rated as a buy and today I updated and reiterated that buy recommendation for United Health Group."
The speaker reaffirms his buy rating on UnitedHealth Group, citing a proprietary discounted cash flow model that estimates a fair value of $458 compared to the current price of $358. He underscores the stock's recovery from earlier price declines and believes upcoming price increases will help restore profit margins.
UNH Shows Attractive Long-Term Return Potential Despite Paused Buybacks
"So, I see at least a 14 15% annual return on United Healthcare from this price. And plus, I'm also seeing a return from the dividend. The dividend right now is around 2.3% or 2 and a half% and it's well covered because the free cash flow yield is about 5 a.5%. So the coverage ratio or the free cash flow payout ratio is about 50%. So I'm seeing around two two and a half% from the dividend 13 14% from earnings per share. So I would say at least 15 16 17% annual return from a recessionp proof company. And there's a lot of bad sentiment. There's a lot of low expectations. So I see a lot of call option like payoff from this one because again expectations are low and the CEO will likely keep raising expectations more and more every quarter and they have a lot of pricing power in terms of raising prices on those plans because again there's really no alternatives to this one."
The speaker highlights United Health's earnings report and future outlook, emphasizing a forecast of 14-17% annual return based on dividend yield and earnings growth. Although buybacks are paused to improve their debt to capital ratio, the commentary is bullish on the company's underlying fundamentals and pricing power, making UNH a compelling long-term investment.
UnitedHealth Group Stabilizes After Turbulence
"remember where they were earlier this year. We're talking about United Health Group. looked like a disaster story. Uh they have beat Wall Street expectations for third quarter earnings also raising the outlook uh for this year. So the health conglomerate may have stabilized after that major meltdown. They're planning for what they call durable and accelerating growth in 2026. Adjusted profit in the third quarter 292 a share. So that's slightly above the average analyst estimate. Uh United Health trying to win back investors confidence. They slashed the earnings forecast, replaced top management, disclosed a federal criminal probe earlier this year, uh, blindsided by higher than anticipated costs, especially in the Medicare business. You remember all this turmoil, it seemed to start to unfold um in the wake of the the shooting of Brian Thompson late last year."
The commentary focuses on UnitedHealth Group's turnaround after a period of severe underperformance. Despite previous challenges including management changes, regulatory probes and cost pressures, the company has exceeded Q3 earnings expectations and is aiming for growth, suggesting a stabilization in its outlook.
UnitedHealth's Earnings Recovery and Outlook Improvement
"UnitedHealth Group. It looked like a disaster story. They had beat Wall Street expectations for third quarter earnings, also raising the outlook for this year. So the health conglomerate may have stabilized after that major meltdown. They're planning for what they call durable and accelerating growth in 2026."
UnitedHealth Group appears to be recovering from earlier turmoil by beating earnings expectations and raising its guidance for 2026. The commentary suggests a stabilization phase, although past challenges and management changes indicate caution remains.
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.