This week’s Alpha Algorithm has identified a new sector, healthcare, that has attracted the attention of the top alpha-generating investment strategies: UnitedHealth Group Incorporated (UNH).
Founded in 1974 and based in Minnetonka, Minnesota, UnitedHealth Group Incorporated offers consumer-oriented health benefit plans and services for a wide range of customers. It also provides Medicaid plans, health care programs and health services through a network of one million physicians and other health care professionals at approximately 6,000 hospitals and other facilities.
United Healthcare versus the S&P 500 Year to Date
Six Top Investment Strategies Betting on UnitedHealth Group Incorporated (UNH)
1. Fundamental Strength
A top U.S. stock based on fundamentals measured by book value, cash flow and sales dividends.
2. Insider and Analyst Sentiment
One of 100 top stocks out of 5,000 U.S stocks where corporate insiders (a director or senior officer of a company, or any person or entity that owns more than 10% of the company’s stock) are buying the stock and Wall Street analysts have recently increased earnings estimates.
3. Large Cap Growth
The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.
4. Momentum Factor
The stock also is one of the top 120 large- and mid-cap U.S. stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of companies’ risk and return.
5. Small-Cap/Value Tilt
Selected using a multi-factor modeling approach, the stock is a smaller-cap or value investment designed to enhance portfolio risk/return characteristics.
6. Broker’s Best
One of Raymond James’ selection of stocks expected to outperform the S&P 500 over either a six- or 12-month period.
Recommendation
Buy UnitedHealth Group Incorporated (UNH) at market today.
Place your initial stop at $128.00.
Options
With the stock currently overbought, I am holding off on recommending any options in this position for now.
Portfolio Update
Both AT&T, Inc. (T) and Johnson & Johnson (JNJ) now boast double-digit percentage gains of 11.28% and 11.49%, respectively.
Raise your stop in AT&T to $42.61 and Johnson & Johnson to $121.00 to lock in at least a 10% gain in these stocks.
Sell your remaining LOW July $75 calls (LOW160715C00075000) that last traded at $5.07 for a 38.9% gain.
Sincerely,
Nicholas A. Vardy
