Crisis will often lead to opportunity.
Look at UnitedHealth Group (SYM: UNH), for example.
Over the last several weeks, UNH plummeted from about $620 to a recent low of $234.60. It became a real train wreck thanks to poor earnings and outlook with rising medical costs.
Second quarter results missed on the bottom line. Then it projected $16 per share adjusted earnings on $445.5 billion to $448 billion in revenue, both of which fell short of the consensus of $20.90 and $449.07B, respectively.
Fear sent the UNH stock screaming lower, with investors bailing out.
But that fear also created a massive opportunity. Not only did it become technically and fundamentally oversold, it became attractive to Warren Buffett, who has often said, “Be fearful when others are greedy and greedy only when others are fearful.”
Taking his own advice, Warren Buffett’s Berkshire Hathaway revealed a five million share stake in UNH worth about $1.6 billion in its 13F filing. And while this bet makes up a very small part of Berkshire’s portfolio, it’s also a significant vote of confidence for the UNH stock.
Even now, it’s still a bargain, both technically and fundamentally.
For one, it’s just starting to pivot from lows last tested in 2020.
Also, if UNH can break above prior resistance at $325, it could go on to refill its bearish gap at around $375. Fundamentally, UNH now trades at 0.59x sales with a price to earnings ratio of 11.75, as compared to the industry average of about 26.
UNH is clearly a bargain at current prices, with a big boost of confidence from Buffett.
Even better, while we wait for UNH to recover, we can collect its quarterly dividend of $2.21 per share, which is payable on September 23 to shareholders of record as of September 15.
Related Reading: Trump Knows What He’s Doing.
When the president says he’s going to let RFK “go wild” … and Big Pharma crashes. Do you think that’s an accident?
When he threatens to “End the Fed” do you think he doesn’t know banking stocks will benefit?
What about when he tells his followers, “Now is a good time to buy,” hours before relaxing tariffs and sending the market soaring? Is that an accident?
Larry Benedict doesn’t think so. He thinks Trump knows what he’s doing… and believes he’s found the perfect tickers for everyday Americans to take advantage next time he triggers a big move.
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Written by Ian Cooper