UNH Stock Pops on Accelerated Payment Promise

UNH is just one insurance stock benefiting from Bernie Sanders' resignation from the presidential race

Deputy Editor
Apr 8, 2020 at 2:09 PM
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UnitedHealth Group Inc (NYSE:UNH) announced last night that it will speed up payments and support totaling nearly $2 billion to health care providers in order to combat the financial challenges posed by the coronavirus pandemic. Additionally, UNH is just one of many health insurers getting a bump after Senator Bernie Sanders announced that he is pulling out of the Democratic presidential race, effectively setting the stage for a general election between current U.S. President Donald Trump and former Vice President Joe Biden. At last check, UNH stock is up 4.4% to trade at $258.85.

Today’s surge has the security on track to close above it’s 200-day moving average for the first time in nearly a month. While UNH is still down 12.1% year-to-date, it has added almost 38% since its March 23 three-year low of $187.72. 

UNH chart APR 8

Analysts are extremely bullish on the blue chip. Of the 18 analysts covering the equity, 15 rate it a “buy” or better. The remaining three all say “hold.” Adding to this is UNH’s consensus 12-month price target of $321.39 which is a 24.1% premium to the stock’s current levels.

In the options pits, puts have been the preference in the last 10 days. UNH sports a 10-day put/call volume ratio of 1.58 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all but 1% of readings during the past 12 months, suggesting a higher-than-usual appetite for long puts of late.

Echoing this, UNH's Schaeffer's put/call open interest ratio (SOIR) of 0.97 sits in the elevated 82nd percentile of its annual range. In other words, short-term options players have rarely been more put-heavy during the past 12 months.


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