Yahoo Finance

Sticking with health care here, shares of the United Health Group rising as new CEO Stephen Hemsley buys about $25 million worth of the company stock, and the move higher comes after shares have taken major hits in recent sessions from pulling guidance to facing legal woes. The health insurer is navigating several headwinds. Here with more on the ripple effects is Mizuho America's Healthcare and your equity strategist, Jared Holtz. Jared, it's good to talk to you as always, um, about these kinds of issues. Um, those of us who have been watching what has been going on with United Healthcare as of late, I, I want to look at the big picture, first of all. What does it tell us about, um, the broader health insurance economy? Or is it so sort of UNH specific that we can't extrapolate?

Great to see you, first of all. Um, it's probably a little bit of both. Really difficult to tell whether it's company specific or industry specific because we've gone through such a prolonged period of higher medical cost trend, higher utilization, and in some periods you see the entire industry, you know, kind of grapple with it, and in other quarters, you know, United may be the one that's afflicted the most, or it could be a peer. So it's not exactly clear, I guess to answer the question, it just seems like in the most recent periods, United's gotten hit the hardest.

Jared, when your, when your clients ask you what to, what to do with this one, uh, what are you advising them, Jared? I mean, the headlines have been rough, but the stock has been nailed, so I'm just curious in the guidance you're giving.

Yeah, I've been basically saying stay away over the near term. It's not like I don't want to be bullish or, or, or want to like the stock at this price. I mean, it's gotten cut in half over just a couple of months. So there, there's a lot of opportunity here, most likely over the medium to long term. I just feel like there are, are too many things going on, right? The, the changing of the management team, at the CEO level, no guidance from the company, which will change over the next few months. I would imagine they would give some sort of financial forecast on the second quarter earnings call. And then third, this DOJ investigation, which may or may not be material, it just seems like with, you know, thousands of other stocks to go buy, there are probably better situations than this one. That being said, I think the valuation is obviously on your side as it's come in a lot. The problem is, we just don't know the numbers. So I've just been advising, you know, I understand the entry, but I've just been advising stay away, um, either way.