Offshore
Photo
The Long Investor
HSI
Johnny who lives in his mothers box room who still believes China is one big rice paddie:
"HSI has crashed this year, wouldn't touch it, only Americana for me'
Reality: Moving in an impulse wave. https://t.co/6DKvQgZlUH
tweet
HSI
Johnny who lives in his mothers box room who still believes China is one big rice paddie:
"HSI has crashed this year, wouldn't touch it, only Americana for me'
Reality: Moving in an impulse wave. https://t.co/6DKvQgZlUH
tweet
The Long Investor
$MSFT is now down -5.5% in a few days.
This is a $150 Billion reduction in Market Cap
tweet
$MSFT is now down -5.5% in a few days.
This is a $150 Billion reduction in Market Cap
$MSFT
$NVDA
$GOOG
$AMZN
4 stocks pulling back 2-5% is enough to accelerate a correction now. tweet
X (formerly Twitter)
The Long Investor (@TheLongInvest) on X
$MSFT
$NVDA
$GOOG
$AMZN
4 stocks pulling back 2-5% is enough to accelerate a correction now.
$NVDA
$GOOG
$AMZN
4 stocks pulling back 2-5% is enough to accelerate a correction now.
Dimitry Nakhla | Babylon Capital®
“Success in investing doesn't correlate with I.Q. once you're above the level of 125. Once you have ordinary intelligence, WHAT YOU NEED is the TEMPERAMENT to CONTROL the urges that get other people into trouble in investing.”
— Warren Buffett 🗣️
#stocks #investing
tweet
“Success in investing doesn't correlate with I.Q. once you're above the level of 125. Once you have ordinary intelligence, WHAT YOU NEED is the TEMPERAMENT to CONTROL the urges that get other people into trouble in investing.”
— Warren Buffett 🗣️
#stocks #investing
tweet
The Long Investor
50 Day MA:
$MSFT - ❌ lost
$NVDA - 🟠 Lost it today & then recovered, weak
$GOOG - ✅
$AMZN - ✅
If the market loses these 4, correction is confirmed.
$NVDA likely to lose the 50 Day MA next.
tweet
50 Day MA:
$MSFT - ❌ lost
$NVDA - 🟠 Lost it today & then recovered, weak
$GOOG - ✅
$AMZN - ✅
If the market loses these 4, correction is confirmed.
$NVDA likely to lose the 50 Day MA next.
50 Day MA:
$MSFT - ❌ lost
$NVDA - 🟠Testing
$GOOG - ✅
$AMZN - ✅
If the market loses these 4, correction is confirmed.
$NVDA is next to test the 50 Day MA. tweet
X (formerly Twitter)
The Long Investor (@TheLongInvest) on X
50 Day MA:
$MSFT - ❌ lost
$NVDA - 🟠Testing
$GOOG - ✅
$AMZN - ✅
If the market loses these 4, correction is confirmed.
$NVDA is next to test the 50 Day MA.
$MSFT - ❌ lost
$NVDA - 🟠Testing
$GOOG - ✅
$AMZN - ✅
If the market loses these 4, correction is confirmed.
$NVDA is next to test the 50 Day MA.
Offshore
Photo
The Long Investor
$QQQ Only TLI can share a chart from 6 months ago of the market and show you were the price is today.
$144 was lost for Wave 5, so Wave A has started.
Clockwork.
tweet
$QQQ Only TLI can share a chart from 6 months ago of the market and show you were the price is today.
$144 was lost for Wave 5, so Wave A has started.
Clockwork.
$QQQ 5 year projection.
Be ready for the Fed pivot next year for Wave 2.
Otherwise, I am bullish on Tech for the next 5 years. https://t.co/cpnw7xjPDT tweet
Offshore
Photo
Giuliano
One of the most profound passages I've read.
I frequently need to revisit it.
tweet
One of the most profound passages I've read.
I frequently need to revisit it.
Perhaps my favourite passage in all of Dostoevsky https://t.co/JUGHNUo4uO tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capital®
On April 3, I shared my analysis on $UNH suggesting it was undervalued & a good consideration at $458💵
Since that post, $UNH is trading +8.3% higher 📈 while the $SPY is down -3.5% in the same timeframe 📉
As I stated in my analysis:
“As you can see, $UNH appears to have attractive return potential even if we assume 18x earnings (a multiple below both its 5-year & 10-year mean) & a reduced growth rate
That’s a great rate of return for an excellent capital allocator & wide-moat recession-proof business like $UNH
Today at $458💵 $UNH appears to be a strong consideration for investment”
#stocks #investing
___
Not every business that could be undervalued will react this way shortly after its share price trades at an attractive range
And if you’re a long-term investor — what happens over the course of 3 weeks, 3 months, or even 3 years shouldn’t really matter 🧘🏽♂️
Looking back at these short-term increases, HOWEVER, reinforces & strengthens the conviction an investor can have when relying on fundamental analysis 💯
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.
𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲."
A sober valuation analysis on $UNH 🧘🏽♂️
•NTM P/E Ratio: 16.50x
•5-Year Mean: 19.67x
•NTM FCF Yield: 6.84%
•5-Year Mean: 5.86%
As you can see, $UNH appears to be trading below fair value
Going forward, investors can receive ~19% MORE in earnings per share & ~17% MORE in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $UNH is a great business
BALANCE SHEET✅
•Cash & Total Inv: $75.34B
•Long-Term Debt: $58.26B
$UNH has a strong balance sheet, an A+ S&P Credit Rating & 8.96x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 18.6%
•2020: 19.1%
•2021: 19.1%
•2022: 19.4%
•2023: 19.1%
RETURN ON EQUITY✅
•2019: 24.1%
•2020: 23.8%
•2021: 24.1%
•2022: 25.4%
•2023: 25.0%
$UNH has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $122.49B
•2023: $371.62B
•CAGR: 11.73%
FREE CASH FLOW✅
•2013: $5.68B
•2023: $25.68B
•CAGR: 16.28%
NORMALIZED EPS✅
•2013: $5.50
•2023: $25.12
•CAGR: 16.40%
PAID DIVIDENDS✅
•2013: $1.05
•2023: $7.29
•CAGR: 21.38%
SHARE BUYBACKS✅
•2013 Shares Outstanding: 1.02B
•LTM Shares Outstanding: 0.94B
By reducing its shares outstanding ~7.8%, $UNH increased its EPS by ~8.4% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 14.6%
•LTM Operating Margins: 8.7%
•LTM Net Income Margins: 6.0%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~19% MORE in EPS & ~17% more in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $UNH has to grow earnings at a 8.25% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2025 EPS growth over the next few years to be more than the (8.25%) required growth rate
However, consider the recent Medicare Rate Decision, I’ve assumed only a 10% EPS growth rate for 2025 & 2026 💡 (well below the current expected rates of 12.8% for both years):
2024E: $27.7[...]
On April 3, I shared my analysis on $UNH suggesting it was undervalued & a good consideration at $458💵
Since that post, $UNH is trading +8.3% higher 📈 while the $SPY is down -3.5% in the same timeframe 📉
As I stated in my analysis:
“As you can see, $UNH appears to have attractive return potential even if we assume 18x earnings (a multiple below both its 5-year & 10-year mean) & a reduced growth rate
That’s a great rate of return for an excellent capital allocator & wide-moat recession-proof business like $UNH
Today at $458💵 $UNH appears to be a strong consideration for investment”
#stocks #investing
___
Not every business that could be undervalued will react this way shortly after its share price trades at an attractive range
And if you’re a long-term investor — what happens over the course of 3 weeks, 3 months, or even 3 years shouldn’t really matter 🧘🏽♂️
Looking back at these short-term increases, HOWEVER, reinforces & strengthens the conviction an investor can have when relying on fundamental analysis 💯
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.
𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲."
A sober valuation analysis on $UNH 🧘🏽♂️
•NTM P/E Ratio: 16.50x
•5-Year Mean: 19.67x
•NTM FCF Yield: 6.84%
•5-Year Mean: 5.86%
As you can see, $UNH appears to be trading below fair value
Going forward, investors can receive ~19% MORE in earnings per share & ~17% MORE in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $UNH is a great business
BALANCE SHEET✅
•Cash & Total Inv: $75.34B
•Long-Term Debt: $58.26B
$UNH has a strong balance sheet, an A+ S&P Credit Rating & 8.96x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 18.6%
•2020: 19.1%
•2021: 19.1%
•2022: 19.4%
•2023: 19.1%
RETURN ON EQUITY✅
•2019: 24.1%
•2020: 23.8%
•2021: 24.1%
•2022: 25.4%
•2023: 25.0%
$UNH has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $122.49B
•2023: $371.62B
•CAGR: 11.73%
FREE CASH FLOW✅
•2013: $5.68B
•2023: $25.68B
•CAGR: 16.28%
NORMALIZED EPS✅
•2013: $5.50
•2023: $25.12
•CAGR: 16.40%
PAID DIVIDENDS✅
•2013: $1.05
•2023: $7.29
•CAGR: 21.38%
SHARE BUYBACKS✅
•2013 Shares Outstanding: 1.02B
•LTM Shares Outstanding: 0.94B
By reducing its shares outstanding ~7.8%, $UNH increased its EPS by ~8.4% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 14.6%
•LTM Operating Margins: 8.7%
•LTM Net Income Margins: 6.0%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~19% MORE in EPS & ~17% more in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $UNH has to grow earnings at a 8.25% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2025 EPS growth over the next few years to be more than the (8.25%) required growth rate
However, consider the recent Medicare Rate Decision, I’ve assumed only a 10% EPS growth rate for 2025 & 2026 💡 (well below the current expected rates of 12.8% for both years):
2024E: $27.7[...]
Offshore
Dimitry Nakhla | Babylon Capital® On April 3, I shared my analysis on $UNH suggesting it was undervalued & a good consideration at $458💵 Since that post, $UNH is trading +8.3% higher 📈 while the $SPY is down -3.5% in the same timeframe 📉 As I stated in my…
7 (10.6% YoY) *FY Dec
2025E: $30.54 (10.0% YoY)
2026E: $33.59 (10.0% YoY)
$UNH has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $UNH ends 2026 with $33.59 in EPS & see its CAGR potential assuming different multiples
19x P/E: $638.21💵 … ~14.3% CAGR
18x P/E: $604.62💵 … ~12.1% CAGR
17x P/E: $571.03💵 … ~9.9% CAGR
As you can see, $UNH appears to have attractive return potential even if we assume 18x earnings (a multiple below both its 5-year & 10-year mean) & a reduced growth rate
That’s a great rate of return for an excellent capital allocator & wide-moat recession-proof business like $UNH
Today at $458💵 $UNH appears to be a strong consideration for investment
However, keep in mind how volatile $UNH (and all health insurers) can get amid regulatory & political risks
Those considering $UNH would be wise to piece into the position, leaving room for additional purchases if $UNH continues to trade down to an even more attractive valuation
E.g. 1/3 of the purchase at $458💵, another 1/3 at $410💵, & 1/3 at $380💵
#stocks #investing
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.
𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲. "- Dimitry Nakhla | Babylon Capital®
tweet
2025E: $30.54 (10.0% YoY)
2026E: $33.59 (10.0% YoY)
$UNH has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $UNH ends 2026 with $33.59 in EPS & see its CAGR potential assuming different multiples
19x P/E: $638.21💵 … ~14.3% CAGR
18x P/E: $604.62💵 … ~12.1% CAGR
17x P/E: $571.03💵 … ~9.9% CAGR
As you can see, $UNH appears to have attractive return potential even if we assume 18x earnings (a multiple below both its 5-year & 10-year mean) & a reduced growth rate
That’s a great rate of return for an excellent capital allocator & wide-moat recession-proof business like $UNH
Today at $458💵 $UNH appears to be a strong consideration for investment
However, keep in mind how volatile $UNH (and all health insurers) can get amid regulatory & political risks
Those considering $UNH would be wise to piece into the position, leaving room for additional purchases if $UNH continues to trade down to an even more attractive valuation
E.g. 1/3 of the purchase at $458💵, another 1/3 at $410💵, & 1/3 at $380💵
#stocks #investing
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.
𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲. "- Dimitry Nakhla | Babylon Capital®
tweet