Becker Business Podcast Summary: "How the Mighty Have Fallen: United, Centene, and Novo Nordisk Struggle"

Release Date: August 2, 2025
Host: Scott Becker

Introduction

In the episode titled "How the Mighty Have Fallen: United, Centene, and Novo Nordisk Struggle," Scott Becker delves into the recent downturns faced by three major healthcare giants: UnitedHealthcare, Centene, and Novo Nordisk. Once celebrated for their exceptional performances and market dominance, these companies have experienced significant declines over the past 52 weeks. Becker examines the factors contributing to their struggles and extracts valuable lessons for investors and business enthusiasts alike.

Company Performance Overview

Becker begins by highlighting the impressive track records of these companies in previous years:

• UnitedHealthcare: Recognized as the largest and strongest healthcare insurance company, bolstered by the growth of its provider network and its subsidiary, Optum.

• Centene: Emerged as the leader in managed Medicare and Medicaid plans, capturing substantial market share in these sectors.

• Novo Nordisk: Gained remarkable value through its GLP1s and weight loss drugs, capitalizing on the growing demand for obesity treatments.

However, the financial landscape has shifted dramatically in the last 52 weeks:

• Centene: Down nearly 66%
• Novo Nordisk: Decreased by 63%
• UnitedHealthcare: Dropped by 58%

Becker remarks, "Over the last several years, United, Centene, and Nordisk have each hit out of the park... but all three of them have just knocked it out of the box the last several years" (00:00).

Analysis of Declines

Becker explores potential reasons behind the downturns:

1. Sustainability of Leadership:

   • Maintaining a leadership position is increasingly challenging due to evolving market dynamics and heightened competition.
   • Becker emphasizes, "it is hard to stay a leader all the time and constantly. And the amount of things you have to do to keep winning in the world of commerce is incredibly challenging" (00:00).

2. Market-Specific Risks:

   • Centene: Highly reliant on the Medicaid managed care market, which faces uncertainties regarding long-term viability and policy changes.
   • Becker states, "you don't know in the long run what's going to happen with that market... it's in a very specific market, largely the Medicaid managed care market" (00:00).

3. Profit Sustainability:

   • Novo Nordisk: The surge in value driven by its weight loss drugs may not be sustainable, as excessive profits often face challenges in the long term.
   • Becker comments, "when something's making excess profits, it's not often that it's sustainable for the long run" (00:00).

4. Market Rotation and Investor Sentiment:

   • Shifts in investor preferences and market rotation can lead to significant stock declines, even for previously strong performers.

Investment Lessons

Drawing from the experiences of these companies, Becker outlines several key investment lessons:

• Diversification and Flexibility:

  • Reliance on a single market segment or product can be risky. Diversifying investments and staying adaptable is crucial for long-term success.

• Continuous Evaluation:

  • Constantly assess the sustainability of a company's growth drivers and be wary of overreliance on trends that may fade.

• Market Awareness:

  • Stay informed about policy changes, market shifts, and competitive landscapes that can impact company performance.

Becker reflects, "If you would have asked me just a couple of years ago about these three companies, I would have told you UnitedHealthcare was a buy and hold stock that you want to have in your portfolio forever. And that might still be the case, but it sure is struggling" (00:00).

Conclusion

Scott Becker concludes by reinforcing the notion that even the most formidable companies are not immune to market challenges. The struggles of UnitedHealthcare, Centene, and Novo Nordisk serve as reminders of the volatility inherent in the business world and the importance of strategic agility.

He summarizes, "How the mighty have fallen. There are so many lessons here... All taken to the chin and plenty of other companies like that" (00:00).

Becker encourages listeners to heed these lessons to navigate the complexities of the business landscape effectively.

Key Takeaways:

• Leadership is Dynamic: Maintaining market dominance requires relentless innovation and adaptability.

• Market Dependencies: Heavy reliance on specific markets or products can expose companies to heightened risks.

• Profit Sustainability: Excessive short-term profits may not translate into long-term stability.

• Investment Strategy: Diversification, continuous evaluation, and market awareness are essential for resilient investment portfolios.

Thank you for tuning into the Becker Business Podcast and Becker Private Equity Podcast. Stay informed and make strategic decisions in the ever-evolving business world.