Health Care Stocks are getting hammered!

Despite good product pipelines, free cash flow and balance sheets. This is a classic setup where wall Street wrongly discounts low risk, high uncertainty (remember they are different!) investments along with the well justified high risk high uncertainty ones.

I've bought some UNH at $30 at less than 50% of fair market value. A concise and accurate analysis of UNH is here.


Other health care stocks I either own and looking to add to positions that all have a large margin of safety (30% discount to FMV or more):

1. SNY (forward P/E is almost 6 and trading just above book!). I suspect this will be a take over target. Buffett owns a significant stake.

2. BMY also trading a deep discount. Great dividend and takeover target. Gurus are buying aggressively including that awfully clever value investor, Bruce Berkowitz. Buy below $20

3. GSK (buy below $40)

4. SGP (but I wouldn't buy above $17 only because better opps are probably coming...

5. COV (only buy at $40 or below though)

6. UNH P/E = 8 P/S 0.51 ROE 23% and Buffett recently adding to his position along with Edward Owens and Chris Davis.

I own SNY, BMY, UNH, SGP and COV.