Investors Buy High Volume of Call Options on UnitedHealth Group (NYSE:UNH)

Key Points

• Investors showed significant interest in UnitedHealth Group (NYSE:UNH) by purchasing 392,146 call options, marking a 45% increase over the typical daily volume.
• Recent analyst ratings have been mixed, with HSBC reducing its target price significantly and several firms downgrading their ratings, while overall, UNH maintains a consensus rating of "Hold."
• UnitedHealth Group's CEO sold shares worth approximately $179,645, reducing his ownership stake by 5.36%, amid various changes in institutional investor positions.

UnitedHealth Group Incorporated (NYSE:UNH - Get Free Report) was the recipient of some unusual options trading activity on Friday. Traders purchased 392,146 call options on the stock. Thisisanincreaseof45% compared to the typical daily volume of 270,780 call options.

Analyst Ratings Changes

A number of research firms recently commented on UNH. HSBC restated a "reduce" rating and issued a $270.00 price objective (down previously from $490.00) on shares of UnitedHealth Group in a report on Wednesday, May 21st. Mizuho lowered their price objective on shares of UnitedHealth Group from $515.00 to $350.00 and set an "outperform" rating on the stock in a research note on Friday, May 16th. Erste Group Bank cut UnitedHealth Group from a "strong-buy" rating to a "hold" rating in a research report on Wednesday, April 30th. KeyCorp cut their price objective on UnitedHealth Group from $400.00 to $350.00 and set an "overweight" rating for the company in a report on Wednesday, July 30th. Finally, Royal Bank Of Canada lowered their target price on UnitedHealth Group from $355.00 to $286.00 and set an "outperform" rating for the company in a research note on Wednesday, July 30th. Three analysts have rated the stock with a sell rating, seven have given a hold rating and fifteen have given a buy rating to the company. According to MarketBeat.com, UnitedHealth Group currently has a consensus rating of "Hold" and a consensus target price of $366.52.

Insider Transactions at UnitedHealth Group

In other news, CEO Patrick Hugh Conway sold 589 shares of the company's stock in a transaction dated Tuesday, June 10th. The shares were sold at an average price of $305.00, for a total transaction of $179,645.00. Following the completion of the transaction, the chief executive officer owned 10,398 shares in the company, valued at approximately $3,171,390. This represents a 5.36% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. 0.28% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On UnitedHealth Group

Several large investors have recently made changes to their positions in UNH. LFA Lugano Financial Advisors SA bought a new position in UnitedHealth Group in the second quarter worth approximately $25,000. Marshall & Sterling Wealth Advisors Inc. acquired a new position in UnitedHealth Group in the fourth quarter valued at approximately $26,000. Bayforest Capital Ltd increased its position in shares of UnitedHealth Group by 685.7% during the first quarter. Bayforest Capital Ltd now owns 55 shares of the healthcare conglomerate's stock worth $29,000 after acquiring an additional 48 shares during the period. Sagard Holdings Management Inc. acquired a new position in shares of UnitedHealth Group during the second quarter worth $29,000. Finally, Islay Capital Management LLC purchased a new stake in shares of UnitedHealth Group in the second quarter valued at about $31,000. 87.86% of the stock is currently owned by hedge funds and other institutional investors.

UnitedHealth Group Price Performance

Shares of NYSE:UNH traded up $38.28 on Friday, hitting $309.77. The company's stock had a trading volume of 45,119,382 shares, compared to its average volume of 12,429,949. The company has a 50-day simple moving average of $288.90 and a 200 day simple moving average of $399.47. UnitedHealth Group has a 1 year low of $234.60 and a 1 year high of $630.73. The company has a debt-to-equity ratio of 0.73, a current ratio of 0.85 and a quick ratio of 0.85. The company has a market capitalization of $280.55 billion, a PE ratio of 13.41, a PEG ratio of 1.75 and a beta of 0.43.

UnitedHealth Group (NYSE:UNH - Get Free Report) last announced its earnings results on Tuesday, July 29th. The healthcare conglomerate reported $4.08 earnings per share (EPS) for the quarter, missing the consensus estimate of $4.45 by ($0.37). UnitedHealth Group had a return on equity of 23.32% and a net margin of 5.04%. The firm had revenue of $111.62 billion during the quarter, compared to the consensus estimate of $111.75 billion. During the same period in the prior year, the company posted $6.80 EPS. The firm's revenue was up 12.9% on a year-over-year basis. Sell-side analysts forecast that UnitedHealth Group will post 29.54 EPS for the current fiscal year.

UnitedHealth Group Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, September 23rd. Stockholders of record on Monday, September 15th will be given a $2.21 dividend. This represents a $8.84 annualized dividend and a dividend yield of 2.9%. The ex-dividend date is Monday, September 15th. UnitedHealth Group's payout ratio is presently 38.30%.

About UnitedHealth Group

UnitedHealth Group Incorporated operates as a diversified health care company in the United States. The company operates through four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. The UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; health care coverage, and health and well-being services to individuals age 50 and older addressing their needs; Medicaid plans, children's health insurance and health care programs; and health and dental benefits, and hospital and clinical services, as well as health care benefits products and services to state programs caring for the economically disadvantaged, medically underserved, and those without the benefit of employer-funded health care coverage.

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