UnitedHealth Group Inc. (UNH, Financial)
As the largest health insurer in the US, UnitedHealth has seen positive tailwinds from deferred elective procedures due to social distancing policies. The deferring of procedures caused earnings for the June quarter to double, but management reaffirmed their guidance for 2020 indicating that they believe the benefit will be short-lived once stay-at-home orders are lifted and elective procedures normalize. The company generates healthy annual cash flow of $19 billion. It has a top three pharmacy benefit manager in OptumRx and an analytics platform in Optum Insight which means the company can interact more with their patients during the health care process. This can create a network effect as patients who utilize more of UnitedHealth’s services can take advantage of discounts that would be hard for smaller regional competitors to replicate.
From Jeff Auxier (Trades, Portfolio)'s Auxier Asset Management summer 2020 market commentary.
Also check out:
