Bridgewater also liked UnitedHealth Group Inc. (NYSE:UNH), increasing the size of its position in that health insurer by 75%. Last quarter UnitedHealth Group Inc. (NYSE:UNH)’s revenue grew by 11% compared to the first quarter of 2012, but thanks to lower margins its earnings actually declined. Analysts expect that trend in net income to reverse, and so the stock features trailing and forward earnings multiples of 13 and 11 respectively. This places UnitedHealth at a small premium to Humana, though at least in revenue terms it has been achieving higher growth and it is a larger company by market cap.
Dalio disclosed ownership of a little less than 190,000 shares of Northrop Grumman Corporation (NYSE:NOC). While Northrop Grumman doesn’t look quite as attractive from an income perspective as Lockheed Martin, it does pay a 3% yield. It also meets the value criteria we’ve set out here, with a valuation of 11 times either its trailing earnings or forward estimates, though of course there would be concerns about how it would handle lower federal spending as well. So far Northrop Grumman Corporation (NYSE:NOC)’s business has been showing little change, going by recent reports.
From a long-term perspective we’re interested in aerospace and defense companies as potential value plays, and would be interested in learning more about the two we profiled here. The health insurers and Intel Corporation (NASDAQ:INTC) seem to have higher risk over the long term, as future policy could significantly impact the health insurance industry and the shift in consumer preferences which have been harming Intel Corporation (NASDAQ:INTC)’s business look set to continue. Still, we could see a diversified portfolio potentially taking advantage of low multiples, particularly on health insurers, with the hope that they would be able to deliver at least modest earnings growth in the future.
Disclosure: I own no shares of any stocks mentioned in this article.