UnitedHealth Group trending lower despite fundamentals
Health insurance provider UnitedHealth Group (NYSE: UNH) has been trending lower since early December. Unlike most stocks that bottomed in December and have since been trending higher, UnitedHealth peaked in early December and then fell sharply. It rallied with the market in January but then peaked again in February before falling sharply yet again.
If we connect the highs from December and February we get a downward sloped trend line and the stock just hit that trend line earlier this week. Now the stock has turned lower and it looks as though the resistance will hold.
We see that the 10-day RSI and the daily stochastic readings were both in overbought territory earlier this week, but have now turned lower. The stochastic readings made a bearish crossover on May 23.
The Tickeron AI Trend Prediction Engine generated a bearish signal on UnitedHealth Group on May 22. That signal showed a confidence level of 73% and it calls for a decline of at least 4% over the next month. Past predictions on the stock have been successful 75% of the time.
What is really interesting about Unitedhealth Group is that the fundamental indicators aren’t that bad. In fact, they’re pretty good. The company has grown earnings at a rate of 27% per year over the last three years and the EPS were up 23% in the most recent report. Sales have grown as well, but not as well as earnings. The average annual rate of revenue growth for the last three years was 11%.
Looking at Investor’s Business Daily’s EPS and SMR rating system, UnitedHealth Group scores a 95 on the EPS rating and a B on the SMR rating. Both of those numbers are above average, but the Relative Price Strength rating is a 43. That reading is below average.
UNH's RSI Indicator ascends from oversold territory
The RSI Oscillator for UNH moved out of oversold territory on December 20, 2024. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 26 similar instances when the indicator left oversold territory. In of the 26 cases the stock moved higher. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 51 cases where UNH's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where UNH advanced for three days, in of 345 cases, the price rose further within the following month. The odds of a continued upward trend are .
UNH may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on December 05, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on UNH as a result. In of 92 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for UNH turned negative on December 05, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 45 similar instances when the indicator turned negative. In of the 45 cases the stock turned lower in the days that followed. This puts the odds of success at .
UNH moved below its 50-day moving average on December 05, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for UNH crossed bearishly below the 50-day moving average on December 11, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 18 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where UNH declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for UNH entered a downward trend on December 18, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 80, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: UNH's P/B Ratio (5.086) is slightly higher than the industry average of (3.063). P/E Ratio (20.524) is within average values for comparable stocks, (17.509). UNH's Projected Growth (PEG Ratio) (1.382) is slightly higher than the industry average of (1.089). Dividend Yield (0.015) settles around the average of (0.020) among similar stocks. UNH's P/S Ratio (1.236) is slightly higher than the industry average of (0.684).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. UNH’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
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General Information
a provider of hospital and medical service plans
Industry ManagedHealthCare