If Health Care stocks Rally then Buy UnitedHealth Group
Posted July 30th, 2008 by Frank Lara Jr
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Health Care has been getting some minor attention lately as stocks that may be undervalued and ready for a jump. If that's the case, let's go classic text book with Warren Buffet's pick for the sector: UnitedHealth Group Inc. (NYSE:UNH).
Warren bought in at $219.9 million for 6,400,000 shares, not a big purchase for him, but he's still holding it.
Just for fun, let's take a look at the wild ride UNH shares have been on since December:
| Shares | Date | Price | Total Value |
| 6,400,000.00 | 12/20/2007 | $58.11 | $ 371,904,000.00 |
| 6,400,000.00 | 1/15/2008 | $55.28 | $ 353,792,000.00 |
| 6,400,000.00 | 2/14/2008 | $46.97 | $ 300,608,000.00 |
| 6,400,000.00 | 3/20/2008 | $35.23 | $ 225,472,000.00 |
| 6,400,000.00 | 6/17/2008 | $30.00 | $ 192,000,000.00 |
| 6,400,000.00 | 6/26/2008 | $25.97 | $ 166,208,000.00 |
| 6,400,000.00 | 7/11/2008 | $22.16 | $ 141,824,000.00 |
| 6,400,000.00 | 7/30/2008 | $27.28 | $ 174,592,000.00 |
Why should you care about Health Care stocks?
Because the talking heads are beginning their coverage so they can say "I told you so" and get you to buy their newsletters, subscriptions, and Cramer Bobble Heads.
Don't believe it, Believe it. You can throw your money away on Jim Cramer related goods, here, spend away:
Jim Cramer Store www.NBCUniversalStore.com
Fellow Masters, CNBC knocked off $9.98, better buy now while supplies last!!
The Fool.com just put out an article titled:
5 Health Care Companies Flying Below the Radar, the list consists of the following:
| Company |
Market Cap (billions) |
P/E |
CAPS rating |
|---|---|---|---|
|
Endo Pharmaceuticals (Nasdaq: ENDP) |
$2.9 |
14.3 |
***** |
|
Pain Therapeutics |
$0.4 |
35.4 |
**** |
|
Invitrogen (Nasdaq: IVGN) |
$3.9 |
23.5 |
**** |
|
Charles RiverLaboratories (NYSE: CRL) |
$4.5 |
26.6 |
***** |
|
Hospira (NYSE: HSP) |
$6.0 |
25.8 |
**** |
Source: Motley Fool CAPS.
Then the ultimate talking heads put out this article on Monday:
Election-Year Trades: Health Care
CNBC, Englewood Cliffs - Jul 28, 2008
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So if Warren bought it, what happened?
UnitedHealth Group Inc., a stellar stock for a decade, returned to Earth in the first half.
The total 2008 year-to-date return for UNH shares is at -53%.
In the past few weeks UNH announced that it's laying off 4,000 employees as the insurance market softens and, separately, agreed to pay $912 million to settle two class-action lawsuits regarding stock-options practices that have dogged the company for two years and led to the resignation of its highly paid CEO in late 2006.
The chart is ugly, but is beginning to show some strength:
Both common sense and Spidey-Sense is telling me that UNH deserves serious attention while trading at these levels. Read the articles I've linked to, do some research, and consider entering before the masses take away any decent gains to be made.
But if you want to stick to buying crap, how about this 'Limited Edition' stable of bulls seen on Mad Money. It's only $50, limited, and may increase in value!
Bullshit. Colored plastic pieces of garbage that you can treasure forever and be reminded of the stocks that lost you money.
Discliamer: No positions in UNH.
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