$UNH · Mark Roussin, CPA · 2026-11-05

The first company is a healthcare company that I believe offers an attractive valuation at a time when the healthcare sector was performing very well.

The first stock we will look at today is a stock that resembles Buffett's style, and that is UnitedHealth .

Okay, with that said, let's move on to our first stock, which is UnitedHealth. Arrow symbol UNH. This purchase is slightly different from the other two that we will discuss later, as this is a healthcare-related stock.

UnitedHealth has gone through a very difficult period . It has seen a rise in medical costs, which has put pressure on profitability. The company faced regulatory oversight that seemed to be ever-present.

There were concerns about her work in the Medicare Advantage program and the performance of some operations within Optom.

During the company's third-quarter earnings results, revenues reached approximately $113 billion. Adjusted earnings per share reached $4.69 per share . Management raised its full-year adjusted earnings forecast to at least $20.50 per share.

This is important because it indicates that the company's efforts to stabilize profitability are beginning to show progress. UnitedHealth reported an adjusted Medicare coverage rate of approximately 88.4%.

This is an improvement compared to last year, when they scored 89.9%, so this is encouraging.

I don't need UnitedHealth to become a high-growth technology company for this investment to succeed. I just need the business to stabilize , for medical cost trends to become more predictable, and for profits to recover.

If that happens, and I believe it will, there is an opportunity for investors to take advantage of improved earnings and the potential for a higher valuation multiple. we can see that UnitedHealth shares have risen by more than 20% over the past year, and its market value is currently around $360 billion.

the current fair price is around $540 per share, which means more than 30% above today's market price. Looking at the earnings forecast, analysts expect the company to earn 23.29 cents next year, giving the stock a forward price-to-earnings ratio of just 17 times; This compares to UNH's five-year average, which is nearly 20 times higher .

So, we have growing revenues and improving profitability, yet the stock is trading at a discount to its historical average.

Aside from the rating, I also like the fact that UnitedHealth operates in multiple areas of healthcare. Care provides health insurance; Optum operates in healthcare services, pharmacy benefits, and other related businesses.

This creates a large, integrated healthcare platform, but it also creates regulatory and operational complexities, which is one of the biggest risks as well.

There have been calls for changes to how large healthcare organizations operate, and any significant regulatory changes could affect UnitedHealth's profitability. Therefore, I am not buying this company because I believe the risks have disappeared; Rather, I am buying it because I believe the valuation at my purchase price offers an interesting opportunity if management can continue to implement the transformation plan .

The bottom line is: I use UNH to increase my exposure to the healthcare sector, but the investment thesis is based on stable earnings, not just a rebound in the share price. Here's a look at a trading alert from within my investment community when I bought UNH at the end of September at $375.

So, I am already making a profit of approximately 7% in this position .

So, these are the three stocks I recently bought: UnitedHealth, Sterling, and Vertief. UnitedHealth represents an opportunity for transformation in primary healthcare and a good price assessment.