While tech titans like Nvidia and Apple remain out of favor, UnitedHealth Group leads the latest list of new buys by the best mutual funds.
The medical sector dominates the list, with Vertex Pharmaceuticals, Pfizer, Merck, Bristol Myers Squibb and Eli Lilly joining UNH stock.
Fellow managed care leaders Elevance Health, which just changed its name from Anthem, Humana, Centene and Cigna also made the list.
UnitedHealth stock has also earned as spot on the IBD 50 and IBD Leaderboard lists of the best stocks to buy and watch.
As medical stocks dominated the new report on new buys by top funds, leading money managers injected an estimated $296 million worth of UNH stock. In further evidence strong demand. Plus, the company has also seen eight quarters or rising fund ownership.
UnitedHealth Gets Ready For EPS Checkup
Headquartered in Minnesota, UnitedHealth offers health benefit programs for individuals, employers, and Medicare and Medicaid beneficiaries. It contracts directly with more than 1.5 million physicians and care professionals, as well as over 6,700 hospitals and other care facilities nationwide. UnitedHealth also provides health benefits and delivers care to people through owned and operated health care facilities in South America.
UnitedHealth's model aims to contain health costs for its managed care arm, partly by insourcing health services to its own cost-efficient locations.
Last month, Optum — part of the UnitedHealth Group — launched a laboratory benefit management solution to reduce unnecessary testing. The potential savings for health plans range from $12-$36 per member per year, or more than $3 billion annually.
The company's three-year annual earnings growth rate of 17% has come down a bit but remains solid among megacap companies. Its 14% annual EPS growth forecast for both 2022 and 2023 beats most of its industry peers.
UnitedHealth is set to report earnings on July 15 before the market open.
UnitedHealth Stock Monitors Buy Point
Since clearing a 507.35 buy point in a double bottom, UnitedHealth Group has now added a handle, giving an alternate entry at 518.80. The chart pattern could also be viewed as a cup with handle with the new handle buy point. After briefly clearing that entry on Friday, UNH stock is trading just below it to start the week.
The relative strength line continues its upward trend and is just shy of a new high.
While its risky to buy any stock just before an earnings report, see if UnitedHealth gets a boost when it reports before Friday's open.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
