• January 26, 2023

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It’s the price charts. For one thing, anyway.

These 2 big names seem unaffected by the Federal Reserve, the direction of interest rates or the price of oil at the pump.

Both stocks have headed higher, in general, whatever the macroeconomic talk is.

Eli Lilly (NYSE:LLY) hit the new all-time high a few days ago and has now backed off somewhat as big sellers decided to go ahead and take a profit. This is understandable, of course, but the stock remains in an uptrend.

With a price-earnings ratio of 48, the big drug manufacturer could not be considered a value stock — the p/e of the S&P 500 right now is 20.25.

That doesn’t matter to the analysts at major investment firms who continue to like Eli Lilly’s prospects for the future. Morgan Stanley
has an “overweight” rating on the stock with a price target of $364.

wa Securities has an “outperform” rating on the drug company. Their price target, initiated in January, was $286, so Eli Lilly has outperformed, for sure.

Here’s the monthly chart:

The price is continuously higher — with slight dips — from 2008 onward, a rare achievement. The upward move from 2021 to the present is so hot that you have to wonder if it can continue like that.

Here’s Eli Lilly’s daily price chart:

The buying continued from the February lows with occasional periods of selling, right up to the all-time high in mid-July. The relative strength indicator and the moving average convergence/divergence indicator (below the price chart) suggest a slowing of momentum, but who knows?

UnitedHealth Group

offers healthcare plans. Headquartered in Minneapolis, Minnesota, this year’s earnings are good: up by 12.8%. The past 5-year record of earnings growth is good as well: up by 20.10%.

The price-earnings ratio of 27.93 is not outrageous for a successful company in this field. UnitedHealth pays its investors a 1.23% dividend — not a lot but a sign of respect to those holding the stock.

The monthly price chart is here:

Similar to the Eli Lilly monthly chart, this stock has headed steadily higher since 2009 with the occasional short-term sell-off. It’s actually putting in a new closing high that’s higher than the earlier April, 2022 spike up.

The UnitedHealth Group daily price chart looks like this:

The stock goes up and down in price but the lows are a little higher and there’s continued more buying than selling. The test will be that April high 550: can UnitedHealth Group make it back up there and then go even further?

Goldman has a “buy” rating on the stock with a price target — made in January — of $535. Good call.

Not investment advice. For educational purposes only.


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