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UnitedHealth Group (UNH)

by Zacks Equity Research

April 05, 2012 | Comments : 0 Recommended this article: (0)
UNH

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We are reiterating our Outperform recommendation on shares of UnitedHealth Group (UNH) prior to the release of its first-quarter earnings scheduled on April 18, 2012, to reflect its better-than-average operating fundamentals and expected strong performance in 2012. The company ended the year 2011 with better performances showing growth in membership, revenues, operating margins and cash flow.

The company strengthened its key capabilities to respond to the emerging growth opportunities. These initiatives have been taken to expand its Medicaid and Medicare business, growing the health service business and expanding international operations.

Though certain headwinds such as high unemployment, growing medical cost, pressure from Health Care overhaul, etc. remain, we believe the company will beat the odds given its diversified business model with leading market share positions in the Commercial, Medicare and Medicaid markets. A solid balance sheet and a highly conservative investment portfolio will further help it to outperform its peers.

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