UnitedHealth Group Inc. (NYSE:UNH) — This leading health care benefits company provides services to almost 41 million individuals in the United States and 4.8 million in Brazil.
In mid-April, S&P Capital IQ raised its opinion of UNH stock to “buy” from “hold” after the company reported Q1 earnings of $1.26 per share, beating estimates by $0.20. Sales increased 13% in the first quarter as a result of strong membership growth, which rose by 1 million subscribers.
Analysts at Capital IQ also raised their 12-month price target for UNH stock by $13 to $144 and their 2015 EPS estimate to $6.30, up from $5.70 in 2014.
This health care company is generally considered by analysts to be the “gold standard” in the industry, and thus commands a higher P/E for its above-average growth rate, competitive offerings and healthy cash flow.
I last reviewed UNH stock just over a year ago, when it was trading near $78. Due to its outstanding fundamental and technical characteristics, I recommended shares be bought for a trade to $82. I also said that longer-term buyers could see much higher returns.
UNH stock is up more than 50% since then, and the technical aspects of the chart are still compelling. These include a strong pattern of accumulation, a recent consolidation with a powerful bullish “V,” and the stock’s ability to successfully track its 50-day moving average and remain well above its 200-day moving average.
Buy UNH stock at the market for a trade to $132, which would result in a gain of more than 10%. As before, investors who purchase shares to hold could be well rewarded in the long term.
