As earnings season gears up for another go-round, all the biggest names are queuing on Wall Street to report their second-quarter numbers. Next up -- mega-health insurer UnitedHealth Group
After the news comes out, we'll have time aplenty to dissect it. But in these few hours before we begin obsessing over UnitedHealth's short-term progress, let's take a moment to review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 60,000 investors for their views on well over 4,000 companies, UnitedHealth among them. Here's what Fools have to say about the company.
Up or down?
More than 1,600 investors have submitted opinions on the company, making UnitedHealth the 45th-most-rated stock in all of CAPS-land. The verdict: This stock is in fine fettle.
Of CAPS investors, 98% expect UnitedHealth stock to outperform the market, and the very best investors -- our CAPS All-Stars -- give the firm a whopping 99% approval rating. Little wonder, then, that UnitedHealth earns a perfect five-star CAPS rating, a status it shares with only a few of its peers:
|
Health Care Plans Group |
|
|---|---|
|
UnitedHealth Group |
***** |
|
Coventry
Health Care |
***** |
|
Medco Health |
***** |
|
Cigna |
**** |
|
WellPoint |
**** |
|
AMERIGROUP |
** |
|
Molina Healthcare |
** |
Wall Street vs. Main Street
Unlikely as it might seem, Wall Street is even more optimistic about UnitedHealth, with all nine of the analysts tracked on CAPS giving this stock the thumbs-up. Which is pretty surprising, when you consider that the stock has underperformed the S&P 500 by 16 percentage points over the past 52 weeks.
Bull pitch
UnitedHealth bulls (of which I'm one) discount the firm's involvement in the stock-option backdating scandal as irrelevant to the business's fundamentals, and point to Warren Buffett's recent expansion of his position in the stock as further evidence that it's a buy. Bulls call the company "[as] good a play as any for the healthcare industry," even as they acknowledge "the usual risks."
Bear pitch
What risks might those be, you ask? For one thing, the PR problem -- the perception that as a health insurer, UnitedHealth makes "money -- lots of money -- from sick people." The stigma of the firm's prominent role in the backdating scandal. And, of course, the ever-present risk that Congress will eventually get around to enacting health-care reform and put the insurers out of business.
Who said that?
To learn the identities of the wise Fools who penned these words, to examine their records (and see whether they know whereof they speak), and to explore the plethora of additional financial data we've put together on the company, just click here.
UnitedHealth and Coventry Health Care are Stock Advisor selections. UnitedHealth is also an Inside Value recommendation. These market-beating newsletters are both available for a free 30-day trial.
Fool contributor Rich Smith owns shares of UnitedHealth. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's ranked No. 608 out of more than 60,000 investors. The Fool has a disclosure policy.
