UNH Up 30% In A Month. Do You Buy Or Wait?
UnitedHealth (UNH) stock is up 29.9% in 21 trading days. Already own the stock? You might want to consider holding it. Planning to buy? Put it on your watch list. Consider the following data:
- Size: A $280 Bil company with $423 Bil in revenue currently trading at $308.80.
- Fundamentals: Last 12 month revenue growth of 9.7% and operating margin of 7.3%.
- Liquidity: Has Debt to Equity ratio of 0.3 and Cash to Assets ratio of 0.1
- Valuation: Currently trading at P/E multiple of 13.2 and P/EBIT multiple of 9.1
- Has returned (median) 46.1% within a year following sharp dips since 2010. See UNH Dip Buy Analysis.
While we like to ride the momentum if the fundamentals check out – for UNH, see Buy or Sell UNH Stock – we are vary of bull traps. Specifically, it is worth trying to answer if things get really bad, and UNH drops 20-30% to $216.16 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into UnitedHealth (UNH) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: UNH provides diversified health care services, including consumer health benefit plans for various employers and individuals, and pharmacy care services like retail, home delivery, specialty, and clinical programs.
2022 Inflation Shock
- UNH stock fell 19.3% from a high of $555.15 on 31 October 2022 to $447.75 on 13 July 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 17 July 2024
- Since then, the stock increased to a high of $625.25 on 11 November 2024 , and currently trades at $308.80
| UNH | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -19.3% | -25.4% |
| Time to Full Recovery | 370 days | 464 days |
2020 Covid Pandemic
- UNH stock fell 36.2% from a high of $305.31 on 19 February 2020 to $194.86 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 1 June 2020
| UNH | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -36.2% | -33.9% |
| Time to Full Recovery | 70 days | 148 days |
2018 Correction
- UNH stock fell 24.3% from a high of $286.33 on 3 December 2018 to $216.84 on 17 April 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 16 December 2019
| UNH | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -24.3% | -19.8% |
| Time to Full Recovery | 243 days | 120 days |
2008 Global Financial Crisis
- UNH stock fell 72.4% from a high of $58.99 on 21 December 2007 to $16.30 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 2 April 2012
| UNH | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -72.4% | -56.8% |
| Time to Full Recovery | 1229 days | 1480 days |
Worried that UNH could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.