Why UnitedHealth Is Down 50% In A Month And What Happens Next

(12min)

Summary

  • Trump wants to cut out the middleman, will he be able to?
  • UNH's exposure to PBM risks is real, but is the market pricing in the worst-case scenario.
  • I look at the legal and regulatory routes to reform, as well as financial estimates on UNH of my base case.
  • I provide a recommendation of how to play UNH in the current environment.
  • Looking for a portfolio of ideas like this one? Members of The Dividend Freedom Tribe get exclusive access to our subscriber-only portfolios. Learn More »

President Trump Announces Plan To Reduce The Cost Of Prescription Drugs

Andrew Harnik/Getty Images News

Written by Sam Kovacs

Introduction

It's not been a great month for pharmacy benefit managers (referred to as PBMs from here on).

A few days ago, President Trump said in a press conference:

We're going

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of UNH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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