Warren Buffett’s Berkshire Hathaway, Other Billionaires Bet Big on UnitedHealth Amidst Challenges
Warren Buffett’s Berkshire Hathaway, Other Billionaires Bet Big on UnitedHealth Amidst Challenges
In a significant vote of confidence, Warren Buffett’s Berkshire Hathaway disclosed a new $1.6 billion stake in UnitedHealth Group, according to its latest SEC filing covering second-quarter holdings. This move comes as the healthcare giant grapples with a series of setbacks, including a substantial 40% stock decline this year, disappointing earnings, rising operational costs, a CEO transition, and an ongoing Department of Justice investigation.
Berkshire Hathaway was not alone in identifying value in the beleaguered insurer. Other prominent investors, including David Tepper’s Appaloosa Management, Stephen Mandel’s Lone Pine Capital, and quant funds Renaissance Technologies and Two Sigma, also initiated or increased their positions in UnitedHealth during the second quarter. Marshfield Associates, managing $7.5 billion, likewise added to its holdings, citing a belief that most of UnitedHealth’s problems are temporary.
Despite reporting $400 billion in revenue and $15 billion in net profit in 2024, UnitedHealth has faced considerable headwinds. These include a first-quarter earnings miss in April that triggered a 22% selloff, the abrupt resignation of CEO Andrew Witty in May, and a subsequent DOJ investigation into potential criminal Medicare fraud. The company’s stock had plummeted 62% from its November peak before recent rebounds, fueled in part by these high-profile investments and an anticipated increase in Medicare Advantage reimbursement rates for next year.
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