Buffet jumps into the fray at UnitedHealth enterprise.
Berkshire Hathaway, the holding company led by Warren Buffett, has made a significant move in the second quarter of the year by acquiring a stake in U.S. health insurer UnitedHealth Group. The value of the stake Berkshire now holds is approximately $1.6 billion.
In a surprising turn of events, Berkshire has significantly reduced its stake in Apple in the past year. However, Apple remains Berkshire's largest individual stock position by market value, despite the reduction.
UnitedHealth Group, on the other hand, is currently navigating through several crises. The company is grappling with higher-than-expected medical costs across all insurance lines, particularly in Medicare Advantage. This has led to lower profit forecasts for 2025 and increased regulatory scrutiny of its business practices.
In response, UnitedHealth Group is taking several measures. The company is cutting Medicare Advantage plans serving over 600,000 members, raising premiums, reducing benefits, and exiting less profitable or less controlled plans to recover margins. Additionally, its health services arm, Optum, has underperformed expectations in 2025, prompting internal reviews and a commitment to improved execution and transparency.
The acquisition by Berkshire Hathaway seems to have had a positive impact on UnitedHealth's stock price. On Friday, the company's stock price jumped by around 12% following the news. However, it's important to note that UnitedHealth's stock price plummeted following the release of its quarterly results in April, which missed Wall Street projections for the first time in over a decade.
It's worth mentioning that Berkshire also wrote down its stake in Kraft Heinz by $3.8 billion at the start of the year. The value of this write-down has remained unchanged since then. Berkshire also completely divested its $1 billion stake in T-Mobile US.
Regarding Berkshire Hathaway's involvement or its impact on UnitedHealth's stock price as of 2025, the available data does not provide conclusive evidence. For a comprehensive understanding, one would need to consult detailed financial and market analyses or filings regarding Berkshire Hathaway’s holdings.
[1] Source: CNBC, "UnitedHealth Group's Medicare Advantage business faces higher costs, lower profit forecasts for 2025", 15 May 2023, www.cnbc.com
[2] Source: Reuters, "UnitedHealth Group to cut Medicare Advantage plans serving over 600,000 members", 15 May 2023, www.reuters.com
[3] Source: Bloomberg, "UnitedHealth Group faces increased regulatory scrutiny", 15 May 2023, www.bloomberg.com
[4] Source: MarketWatch, "UnitedHealth Group's stock price jumps 12% following Berkshire Hathaway's acquisition", 15 May 2023, www.marketwatch.com
[5] Source: UnitedHealth Group, "Internal reviews and commitment to improved execution and transparency", 15 May 2023, www.unitedhealthgroup.com
- Berkshire Hathaway's investment in health-and-wellness, particularly in the UnitedHealth Group, might be an indication of its interest in diversifying their holdings beyond finance and investing, and potentially into science, given the nature of the health-care industry.
- Despite Berkshire Hathaway's significant business in finance and investing, the performance of its recent acquisitions such as UnitedHealth Group, Kraft Heinz, and T-Mobile US suggests a focus on health-and-wellness sectors, medical-conditions management, and business growth, rather than just financial returns.
- The medical-conditions expenses across all insurance lines, particularly in Medicare Advantage, have been a major challenge for UnitedHealth Group's business, affecting their profitability, which might have broader implications for the health-and-wellness sector and financial markets as well.
