UnitedHealth Group Inc (NYSE:UNH) has transformed from Wall Street darling to crisis headline. Yet ironically, a who's-who of investors doubled down on the stock in Q2 even as volatility reigns.
- Track UNH stock here.
Hedge Funds Loading Up On UNH Stock
- Michael Burry's Scion Asset Management arrived in force with a fresh call option bet and 20,000 UNH shares. This makes UNH nearly 19% of his disclosed holdings.
- David Tepper's Appaloosa LP sharply boosted its stake by 1,300% to 2.45 million shares (worth ~$764 million). UNH is now Appaloosa’s second-largest position.
- Warren Buffett's Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK) quietly opened a massive 5.04 million-share position (~$1.57 billion). His buy-in triggered a pre-market surge of over 11%—a "vote of confidence" amid the chaos.
- Renaissance Technologies, Naya Capital, Solel Partners, and Bluefin Capital also entered or increased positions.
- Meanwhile, Andreas Halvorsen's Viking Global — exited completely, shedding its entire 3.56% stake.
Read Also: Hedge Fund Viking Global Dumps UnitedHealth, Loads Up On AMD, Disney, JPMorgan In Q2 Shake-Up
Why UNH Stock Feels Like A Punch On The Jaw
UNH isn't just down; it's been slogging through a relentless bear run:
- Down 53% over the past year, 46% year-to-date, and 6.9% in the past month.
- Pressure stems from skyrocketing medical costs and grossly slashed earnings guidance. Moreover, the withering medical cost ratio that has shot up 430 basis points year-over-year adds to UNH’s pains.
- Couple that with DOJ probes into Medicare Advantage billing practices. Add in a devastating cyberattack and subpar guidance that took the stock further down.
What's Next For UNH?
Despite the tumult, analysts see a glimmer of light:
- UNH is rated ‘Overweight’ per analysts’ consensus. The average target north of $408.75, per Benzinga data, implies over 50% upside from current levels.
- The company posted 13% revenue growth (~$112 billion). However, profits are down—EPS fell from approximately $6.80 to roughly $4.70—due in part to cost pressures.
- The company has also been a victim of management turbulence, with the exit of CEO Andrew Witty and the return of former CEO Stephen Hemsley. Restoring investor trust will be key.
UnitedHealth's second quarter narrative feels like a Wall Street thriller: legendary investors doubling down, while execution troubles turn friendly skies into turbulence.
Margin damage, regulatory heat, and leadership upheaval have cratered the stock – but the sheer faith of Burry, Buffett, and Tepper suggests deep-value wagers are being laid.
Will UNH revive or remain a turnaround myth? That's the question traders and investors are glued to this quarter.
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