Pundits Predicting Panic in UnitedHealth Group Incorporated (UNH)?

The exact reason why investors have been taking up UnitedHealth Group Incorporated (NYSE:UNH) stock at a frenetic pace might seem like a bit of a head-scratcher at the moment, but that’s only if you are buying the stock for the wrong reasons. On 12 February, the shares accumulated 6.36 points or 2.47 percent at $263.5 with a heavy trade volume of 4.325 million shares. After opening the session at $259.22, the shares went as high as $264 and as low as $256.92, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $260 billion and now has 988.11 million shares outstanding. UnitedHealth Group Incorporated (UNH) stock has gained 6.39 percent of market value in 21 trading days.

UNH stock has a trailing 3-year beta of 0.85, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $12.19 a share in the trailing twelve months. The stock’s value has surged 5.77 percent year to date (YTD) against a rise of 19.25 percent in 12 month’s time. The company’s shares still trade -8.49 percent away from its 1-year high of $287.94 and 24 percent up from 52-week low of $212.49. The average consensus rating on the company is 1.6, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

UnitedHealth Group Incorporated (UNH) will probably climb 16.11 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $345 price as 12-month high target. This represents a whopping 30.93 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $308, which represents a return potential of 16.89 percent when compared to the closing price of the stock of $263.5 on Tuesday, February 12. The lowest price target for the stock is $276 — slightly more than 4.74 percent from UNH’s current share price.

History has shown that shares in UnitedHealth Group Incorporated have gone up on 19 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. Investors will get their next glimpse of UNH’s Q1 earnings on April 18. Analysts are forecasting revenue to climb 8.2 percent to $59.7B in the fiscal first quarter, while earnings are seen soaring by nearly 18.09 percent to $3.59 per share. It earned $3.28 per share, better than the $3.21, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $58.4B, better than the $58B analysts expected. Earnings are estimated to increase by 31.1 percent this year, 13.54 percent next year and continue to increase by 15.8 percent annually for the next 5 years.

Let’s take a look at some insider activity at UnitedHealth Group Incorporated (NYSE:UNH) and see the pattern. The earliest insider trade took place on 01/23/2019. Burke Richard T parted with a total of 11.5 thousand shares of company at average share price of $268. The total for the sales was set at $3.08 million. After this transaction, the Director account balance stood at 1.77 million shares. The stock lost -1.68 percent since that insider sale. On 01/22/2019, Ballard William C Jr, Director, sold 5 thousand shares at a price per share of $266.61. This removed 1.33 million shares from the insider’s fortune and the stock saw a -1.17 percent retreat in value since the news became public. This transaction left 72.7 thousand shares in the Director account.

On 01/17/2019, Director Burke Richard T performed a sale transaction worth $3.91 million. This sale at $260.55 each has eliminated 15 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 1.13 percent increase since the transaction was reported. The insider now is left with 1.78 million shares remaining in the account. Burke Richard T, who performs the Director job, sold 6.09 thousand shares for $1.72 million. The disposal occurred on 11/28/2018 was priced at $281.72 per share. The share price plunged -6.47 percent since the reporting date. Burke Richard T now left with a stake of 1.8 million UNH stock worth $473.66 million after the insider selling.

The stock is currently hovering around the first support level of $258.95. Below this, the next support is placed in the zone of $254.39. Till the time, the UNH stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 49.41 on daily chart, which may remain a cause for concern. If the price breaks below $254.39 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $266.03 mark may result into a pull-back move towards $268.55 level.

Shares of UnitedHealth Group Incorporated (UNH) are trading at a P/E ratio of 21.1 times earnings reported for the past 12 months. The industry UNH operates in has an average P/E of 21.08. Its P/E ratio went as low as 17.74X and as high as 23.21 over the 5-year span.Further, it is sporting a 1.15 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.03.