UnitedHealth Group Incorporated (UNH): A Bull Case Theory

We came across a bullish thesis on UnitedHealth Group Incorporated (UNH) on Substack by Oguz Erkan. In this article, we will summarize the bulls’ thesis on UNH. UnitedHealth Group Incorporated (UNH)'s share was trading at $587.06 as of April 14^th. UNH’s trailing and forward P/E were 37.85 and 19.72 respectively according to Yahoo Finance.

UnitedHealth Group stands as a powerful compounder in the healthcare space, benefiting from the defensive nature of health insurance—a category of spending that consumers prioritize even during economic downturns. In uncertain times, discretionary expenses like tech upgrades, dining out, and travel are often the first to go, but health insurance remains untouchable due to the catastrophic financial consequences of going uninsured. This dynamic gives health insurers, especially UnitedHealth, exceptional pricing power, allowing them to pass on rising costs without losing customers. UnitedHealth’s dominance is underpinned by its vertical integration, particularly through its health services arm, Optum, which continues to grow at a healthy clip above 10% annually. Despite recent concerns sparked by the tragic death of its insurance CEO and skepticism voiced by Bill Ackman regarding profitability, the company’s fundamentals remain unshaken. These events created temporary dislocations in the stock, which long-term believers used as buying opportunities. UnitedHealth’s revenue has compounded at 11% annually over the past five years, and despite modest net profit and return on equity margins at 5%, the consistency and resilience of its business model position it as a reliable performer in all market conditions. Its forward P/E of 20 reflects a fair valuation, especially considering the current environment. The stock has already gained 22% year-to-date, outperforming a declining S&P 500, and still presents a compelling opportunity for investors—particularly on any dip below the $550 level. For those seeking tariff-proof exposure with strong cost-passing capabilities and a resilient growth engine, UnitedHealth remains a top-tier choice. The combination of its indispensable service, stable financials, and strategic integration make it a long-term winner, regardless of market cycles.

UnitedHealth Group Incorporated (UNH) is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 150 hedge fund portfolios held UNH at the end of the fourth quarter which was 112 in the previous quarter. While we acknowledge the risk and potential of UNH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UNH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.