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Re: United Health Group Inc. (UNH)
Buffett thought that at 45$ UNH was cheap. I would not be surprised if he now adds to the position.
Managed health care currently experienced some margin erosion and got beat down for it. That is across the board. However, I don't think that such a huge drop is justified. It is totally disproportionate. There is some evidence of the drop being due to emotional reasons (read irrationality).
Regardless, it is still a very good business with returns ranging from 14% to 25%. Historically the valuation ratios (P/E) ranged from 16 - 28. At a P/E around 6 this is way too low. You don't need to do any calculations to see that this one is dirt cheap.
I am going to swap out of WMT (for a 35% profit) into UNH. It may take a while to play out, but that's an opportunity I simply cannot pass.
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Anything too stupid to be said is sung. [Voltaire]
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