UnitedHealth Group (UNH) Is Today's Dead Cat Bounce Stock

Trade-Ideas LLC identified UnitedHealth Group (UNH) as a "dead cat bounce" (down big yesterday but up big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

UnitedHealth Group

(

UNH

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified UnitedHealth Group as such a stock due to the following factors:

  • UNH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $486.4 million.
  • UNH has traded 1.3 million shares today.
  • UNH is up 3% today.
  • UNH was down 5.6% yesterday.

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More details on UNH:

UnitedHealth Group Incorporated operates as a diversified health and well-being company in the United States. The stock currently has a dividend yield of 1.7%. UNH has a PE ratio of 19. Currently there are 17 analysts that rate UnitedHealth Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for UnitedHealth Group has been 4.5 million shares per day over the past 30 days. UnitedHealth Group has a market cap of $111.8 billion and is part of the health care sector and health services industry. The stock has a beta of 0.60 and a short float of 1.3% with 2.84 days to cover. Shares are up 9.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates UnitedHealth Group as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 26.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, UNITEDHEALTH GROUP INC's return on equity exceeds that of both the industry average and the S&P 500.
  • UNITEDHEALTH GROUP INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNITEDHEALTH GROUP INC increased its bottom line by earning $5.70 versus $5.50 in the prior year. This year, the market expects an improvement in earnings ($6.30 versus $5.70).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income has decreased by 0.3% when compared to the same quarter one year ago, dropping from $1,602.00 million to $1,597.00 million.

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