Raymond James' John Ransom: UnitedHealth will now trade closer to an industry multiple
John Ransom, Raymond James director of healthcare research, joins 'Power Lunch' to discuss why Ransom has pause on shares of UnitedHealth, why the company withdrew its guidance, and much more.
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9 hours ago
- Yahoo
Is UnitedHealth a Millionaire Maker?
The stock's sharp decline, past returns, and competitive advantages make it a tempting buy-the-dip stock idea. Investors should exercise caution when basing their opinions on the past, given the numerous issues that have come to light. UnitedHealth's numerous headaches and massive size signal a difficult path forward for investors seeking life-changing investment returns. 10 stocks we like better than UnitedHealth Group › There is a ton of money in America's healthcare system. The country's annual healthcare expenditures push $5 trillion, representing nearly a fifth of the world's largest economy. UnitedHealth (NYSE: UNH) has generated life-changing returns as one of the industry's most powerful companies. At its peak in late 2024, the stock had returned over 60,000% since 1990. That turns each invested dollar into over $600. But as you may know, the company and stock have plunged into uncertainty after the high-profile slaying of the CEO of the company's insurance and managed care arm, UnitedHealthcare, in December, and numerous setbacks since then, some potentially criminal. It's a conundrum for investors deciding whether UnitedHealth can replicate its past success once the dust settles, or if this is a broken business to avoid. I looked under the hood to gauge whether UnitedHealth can still make investors rich. UnitedHealth operates the largest health insurer in the United States, UnitedHealthcare. While the stock has shed over half its value since the tragic death of UnitedHealthcare's CEO, the parent company's troubles stretch far beyond. Patients enrolled in UnitedHealth's Medicare Advantage plans are seeking more care than UnitedHealth had forecasted, unexpectedly raising costs. Management revised its 2025 guidance in first-quarter earnings in April, then withdrew guidance altogether in May after these trends continued. Additionally, UnitedHealth is facing some serious allegations of unethical business practices. Reports emerged that the U.S. Department of Justice is investigating the company for possible Medicare fraud. Another report alleged that UnitedHealth secretly paid care facilities to deny hospital transfers and other services to patients it covered. It creates a complicated situation for investors, who must try to piece together answers for questions like: Are there any other allegations, investigations, or other controversies that aren't public yet? Is the company guilty of these existing allegations? If so, how much can investors trust the company's past business performance? The logical investment thesis for UnitedHealth is that it remains one of the most powerful players in a multitrillion-dollar healthcare system. It boasts unmatched size, with over $410 billion in annual revenue, and owns multiple components of the healthcare system. For example, it serves as both an insurer and a pharmacy benefits manager (PBM), affording it tremendous leverage over suppliers, providers, and patients. UnitedHealth could face substantial fines, and some employees may even face imprisonment if investigations find that criminal activity occurred in the company's dealings. However, barring the government stepping in and forcing UnitedHealth to break apart, its core competitive advantages (size and vertical integration) are likely to remain intact. Approaching with caution is wise in such a situation where it's unclear to what degree, or for how long, all of UnitedHealth's issues may impact the business and stock. Analysts have dramatically lowered their long-term growth expectations, while the sliding share price has dropped the price-to-earnings ratio to under 13. At the moment, it's hard to envision UnitedHealth returning to business as usual anytime soon. Even if all the controversy goes away overnight, its medical costs are still surging. If UnitedHealth grows its earnings at a 7% annualized rate going forward, the stock's current P/E ratio appears to be a solid value, assuming no serious outcomes from any investigations or allegations. But even if UnitedHealth returns to form, it remains a behemoth of a company with over $400 billion in annual revenue. It will be much harder to generate enough growth from its current size to turn any realistic sum for most individual investors into a fortune. Given the entire picture here, it becomes increasingly clear that UnitedHealth's millionaire-making years are likely in the past. Before you buy stock in UnitedHealth Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and UnitedHealth Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Justin Pope has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy. Is UnitedHealth a Millionaire Maker? was originally published by The Motley Fool
Yahoo
a day ago
- Yahoo
UnitedHealthcare sues The Guardian for looking to ‘capitalize' on CEO's murder
UnitedHealthcare sued The Guardian and its parent on Wednesday for defamation, claiming the US version of the British daily newspaper ran information it knew to be incorrect in order to 'capitalize' on the assassination of the medical insurer's CEO. The article in question was produced and published by The Guardian's US investigations team as part of a series titled 'Too Big to Care' and was available worldwide at publication. In the article, George Joseph, an investigative reporter for The Guardian's US publication, wrote that UnitedHealth Group, UnitedHealthcare's parent, had engaged in cost-cutting tactics by paying off nurses to cut down on hospital transfers. Citing internal emails, documents and interviews with more than 20 current and former staffers, the report claimed that the payments were made 'as part of a UnitedHealth program.' Nursing home residents in need of 'immediate hospital care under the program failed to receive it' because of 'interventions from UnitedHealth staffers,' per the report. The lawsuit from UnitedHealth Group, United Healthcare Services and Optum, the group's health services segment, filed in Delaware's Superior Court, accused The Guardian of publishing 'knowingly false claims' in the story, alleging it used 'deceptively doctored documents' and 'patently untruthful anecdotes' to produce the article. 'The Guardian knew these accusations were false, but published them anyway, brazenly trying to capitalize on the tragic and shocking assassination of UnitedHealthcare's then-CEO, Brian Thompson,' the lawsuit alleged. The Guardian is strongly pushing back against UnitedHealthcare's lawsuit, emphasizing in a statement that it will defend Joseph's reporting. 'The Guardian stands by its deeply-sourced, independent reporting, which is based on thousands of corporate and patient records, publicly filed lawsuits, declarations submitted to federal and state agencies, and interviews with more than 20 current and former UnitedHealth employees — as well as statements and information provided by UnitedHealth itself over several weeks,' The Guardian said in a statement. 'It's outrageous that in response to factual reporting on the practice of secretly paying nursing homes to reduce hospitalizations for vulnerable patients, UnitedHealth is resorting to wildly misleading claims and intimidation tactics via the courts,' the publication said. The health care giant's accusations echo a statement published by UnitedHealth Group the same day The Guardian released its investigation. In the statement, the company accused the publication of building a 'narrative' using 'anecdotes rather than facts.' The company noted that the Justice Department had investigated the allegations, interviewed witnesses, and combed through thousands of documents, only to find 'the significant factual inaccuracies in the allegations.' A UnitedHealth Group spokesperson told CNN that The Guardian 'refused to engage with the truth and chose instead to print its predetermined narrative.' 'The Guardian knowingly published false and misleading claims about our Institutional Special Needs Program, forcing us to take action to protect the clinician-patient relationship that is crucial for delivering high-quality care,' the company said in a statement. However, despite the claim, a spokesperson for The Guardian told CNN that it has 'received no requests for correction or retraction on any aspect of the story.' UnitedHealthcare is being represented by Clare Locke, a law firm known for taking on defamation cases against media organizations. The firm has also represented Project Veritas; and one of its partners, Jered Ede, who is working on the UnitedHealthcare lawsuit, was also Project Veritas's chief legal officer.
New York Post
a day ago
- New York Post
UnitedHealthcare accuses The Guardian of trying to ‘capitalize' on CEO's killing: defamation lawsuit
UnitedHealtcare slapped The Guardian with a defamation lawsuit over a story by the publication related to its billing for nursing home residents. At issue is The Guardian's May 21 story, which alleged that the health care giant made secret payments to nursing homes to reduce hospital transfers in an effort to save money. The lawsuit, which was filed in Delaware Superior Court late Wednesday, claims that The Guardian had knowlingly published demonstrably false' information and tried to capitalize on media interest in the killing of its then-CEO Brian Thompson last year in New York. 4 UnitedHealthCare is suing The Guardian for a May 21 piece, alleging that the health care giant made secret payments to nursing homes to reduce hospital transfers in an effort to save money AFP via Getty Images The health care company alleged that The Guardian used internal emails — which it published excerpts from — were quoted out of context. United Healtcare also disputed some of The Guardian's characterizations of medical events detailed in its exposé 'The Guardian knowingly published false and misleading claims about our Institutional Special Needs Program, forcing us to take action to protect the clinician-patient relationship that is crucial for delivering high-quality care,' a rep for UnitedHealthcare claimed. 'The Guardian refused to engage with the truth and chose instead to print its predetermined narrative.' A rep for The Guardian shot back at UnitedHeathcare's lawsuit, telling The Post that it stands by its May 21 reporting and that it intends to defend itself in court. 'The Guardian stands by its deeply-sourced, independent reporting, which is based on thousands of corporate and patient records, publicly filed lawsuits, declarations submitted to federal and state agencies, and interviews with more than 20 current and former UnitedHealth employees – as well as statements and information provided by UnitedHealth itself over several weeks,' the rep claimed. 'It's outrageous that in response to factual reporting on the practice of secretly paying nursing homes to reduce hospitalizations for vulnerable patients, UnitedHealth is resorting to wildly misleading claims and intimidation tactics via the courts,' he added. In the story, The Guardian claimed internal emails revealed that UnitedHealth supervisors gave their teams 'budgets' showing how many hospital admissions they had 'left' to use up on nursing home patients. 4 An excerpt from The Guardian's May 21 article. The outlet also reported that leaked emails showed that the company also monitored nursing homes that had smaller numbers of patients with 'do not resuscitate' – or DNR – and 'do not intubate' orders in their files. 'The article used a heavily cropped screenshot of an internal UnitedHealth email to knowlingly and falsely accuse UnitedHealth of coercing nursing home residents into digning 'do not rescusitate' papers as a 'cost cutting tactic… even when patients had clearly expressed a desire that all available treatments be used to keep them alive' This is unquestionably defamatory,' the lawsuit alleged. 'The Guardian knew these accusations were false, but published them anyway, brazenly trying to capitalize on the tragic and shocking assassination of UnitedHealthcare's then-CEO, Brian Thompson,' the suit added. 4 UnitedHealthcare claimed that The Guardian, in publishing its article, was trying to 'capitalize' on the murder of its then-CEO Brian Thompson. UnitedHealth Group 4 Accused killer Luigi Mangione was arrested for Thompson's murder and has since pleaded not guilty to state and federal charges. Steven Hirsch for NY Post Thompson was gunned down on a Manhattan sidewalk on Dec. 4 last year. Accused killer Luigi Mangione, 27, was arrested and has since pleaded not guilty to state and federal charges. The embattled UnitedHealthcare has been in the hot seat in recent weeks. The Department of Justice revealed in May that it is investigating UnitedHealthcare for Medicare fraud. Shares of the insurance company have cratered nearly 26% in the last month, as a result.
