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Our Biggest Gainers & Losers of the Day in the $100,000 Build Portfolio

For the 5th December 2024:

• A Real-Life Crime Drama 🎬🔫

• Profit from Oil & Gas 🛢️ 🔥

A Real-Life Crime Drama 🎬🔫 

Money & murder come together a little too often. UnitedHealth’s CEO, Brian Thompson, was tragically killed in Manhattan on Wednesday.

It’s looking like a targeted attack & the details are straight out of a movie. Shell casings engraved with cryptic words like “deny,” “depose,” “defend.” which might be referencing a 2010 book bashing the insurance industry.

UnitedHealth’s insurance division has been getting some backlash over denied claims. It’s allegedly down to ruthlessly using AI for decision-making. Best guesses are that probably has something to do with the shooting.

As you might expect, the market didn’t love this news & UNH is down over 5% on the day.

Is it worth buying the bad news? Or is the drop justified?

The Numbers Look Good 👍️ 

If we take a look back at UNH’s latest earnings report, everything looks good.

• 💵 Revenue: $101 billion in Q3 (+9% YoY).

• 🛒 Big moves: Optum Health & Optum Rx added $7 billion to the top line.

• 🚀 Big Growth goals: Aiming for 13-16% annual EPS growth.

All pretty healthy & there’s no signs of slowing down yet. Their core business operations are firing on all cylinders, too.

They’re making a focus on better outcomes and lower costs with value based care. AI could be the way forward by doing stuff like:

• Shortening pharmacy turnaround times from 7.5 days to 29 seconds.

• Making clinicians more efficient by automating patient reviews.

• Saving $1B in operational efficiencies over two years.

We’d all benefit in a world where healthcare is smarter, faster & cheaper. These types of innovation are getting us closer to that world.

Resilience That’s Built Different 🛡️

So the business is doing fine. Great. But your CEO being murdered after an investor conference is definitely a black Swan event which makes it tough to figure out where the stock goes from here.

I do think that they’ll be fine long term. Why? They’ve dealt with some pretty big issues in the past & come out just fine. (Granted nothing quite like this week’s event).

I’m talking about the medicare rate cuts. They were handled in their stride. Cyberattacks? Survived. Inflation? Still posting big numbers.

Just to be super clear. I’m not saying the CEO being murdered is just another day at the office. It’s a super sad & tragic event. I’m just saying that I think they’ll be able to navigate through it & any huge draw down is a buying opportunity.

The Plan? 🗺️ 

The cause of the drop naturally makes the stock a little more unpredictable than usual.

At market close a further push down was rejected. If that sentiment stays for market open tomorrow, I’ll be adding a small amount to my position size.

If the fall continues, I’ll be keeping my eyes out for $555 which has been a support level since July.

My first price target will be somewhere around $620 which is recent highs & would be an 11%ish gain from current price.

UnitedHealth is the perfect mix of tech & solid execution. When you’ve got a healthcare giant turning $101 billion quarters into a regular thing, it’s hard to imagine they don’t reclaim old highs as a minimum.

Profit from Oil & Gas 🛢️ 🔥

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That’s all! See you same time tomorrow 👋 

P.S Hit reply & let me know what you thought of today’s newsletter. All feedback is welcomed ❤️