Re:The Mark Cuban Cost Plus Drug Company
by wefarrell on Wednesday January 27, 2021 @08:01PM
(#25936684)
UNH shareholders would disagree - I've made 10x on it.
Net income is a poor metric here. It includes acquisition costs (and interest paid on debts for said acquisitions).
Re:The Mark Cuban Cost Plus Drug Company
by lotsofpulp on Wednesday January 27, 2021 @10:06PM
(#25937637)
Net income over a long period of time is appropriate in my opinion. They consistently hover around 5% for 15+ years. It’s a pretty competitive market.
https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g...
I don’t see a lot of juice to squeeze in insurance companies in general.
Re:The Mark Cuban Cost Plus Drug Company
by wefarrell on Thursday January 28, 2021 @11:55AM
(#25944789)
They're using their profits to buy their competitors and downstream partners, which in UNH's case has allows their market cap to grow 10x in 10 years.
The 5% that you quote is after those acquisitions (and taxes) and is not a true indicator of profit.
United health at 6%
https://finance.yahoo.com/quote/UNH/key-statistics/
Similarly, Anthem at 4.22%, CVS at 3%, Cigna at 3.38%, Humana at 5.58%, Molina at 4.57%, Centene at 2.12%.
The reason there’s so much M&A in this space is because there’s no margins, so it’s either go big and win in economies of scale, or go home and go out of business. And people face higher premiums because more people are getting more access to healthcare. There’s no lifetime benefit maximums or pre existing condition exclusions anymore. And the highest premiums are capped at 3x the lowest premiums.