I don't know what's going to happen to UnitedHealth Group (NYSE:UNH) stock in the wake of Thursday's earnings report. And with all respect to the readers who own it, I really don't care. In other words, this is a great company whether or not each quarter fulfills all of the analyst community's hopes, dreams, and hyperbole.

Revenue for this fourth quarter rose more than 14%, and operating earnings climbed 20%, leading to yet another expansion in the operating margin. Sharper-eyed Fools might notice that the margin slipped a bit from the third quarter, but this period included expenses related to the launch of the much-ballyhooed Medicare Part D drug benefit program. At the bottom line, earnings per share rose 20% on an as-reported basis.

Well-controlled expenses have been a big theme here for a while and will, I have to think, become even more important in the future. At some point, this drag race between premiums and medical costs has to end, or else we'll all be paying 200% of our incomes on health care. So with UnitedHealth's advantage of size and scale (it can spread costs across a wider base and have a lot more leverage with health providers), it should be in a good position to keep margins strong and costs to the consumer/client more reasonable.

That's not to say it's easy sledding from here on out. Rivals great and small, like Aetna (NYSE:AET), WellPoint (NYSE:WLP), and Coventry (NYSE:CVH), know the score, and they're not going to just cede customers to UnitedHealth. Plus, you have to acknowledge the threat that somebody will get desperate and cut prices -- an action that could hurt everybody's margins. It hasn't happened so far, and maybe everyone in the industry has smartened up on this subject, but you never know.

The fears about what could happen in the industry aren't the reason I don't own this stock. The reason is price. As I see it (or, rather, model it), the stock is fairly valued. There's nothing wrong with that -- I hold a few "fairly priced" stocks in my portfolio today -- and I'm not suggesting anybody should sell out. But given that I'm a charter member of the cult of margin of safety (that is, buying stocks at a discount to what you think they're worth), I'm going to sit on the sidelines for now.

For more related Foolishness:

UnitedHealth and Coventry are Motley Fool Stock Advisor selections. To see more of the stocks Tom and David Gardner have recommended, take Stock Advisor for a free, no-risk test drive. You'll be happy you did.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).