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Berkshire Hathaway’s newest SEC submitting revealed that the corporate has taken a $1.6 billion stake in UnitedHealth Group.
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Berkshire added a number of others whereas lowering stakes in each Apple and Financial institution of America.
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UnitedHealth has confronted a number of challenges this yr, together with the revelation of a number of DOJ investigations and the resignation of its CEO.
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10 shares we like higher than UnitedHealth Group ›
Shares of UnitedHealth Group (NYSE: UNH) are leaping on Friday, up 13.8% as of two:14 p.m. ET. The spike comes because the S&P 500 (SNPINDEX: ^GSPC) declined 0.1% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) fell 0.3%.
The troubled medical insurance large is lastly seeing its inventory rebound after months of bother, because of the acquisition of 5 million shares by Warren Buffett’s Berkshire Hathaway.
Berkshire Hathaway’s newest regulatory submitting revealed that the corporate took a substantial stake in UnitedHealth. The 5 million-share, $1.6 billion stake makes the huge well being insurer the 18th-biggest place in Berkshire’s portfolio. Buffett’s firm additionally trimmed its positions in Apple and Financial institution of America.
The transfer took Wall Road without warning, given the various points UnitedHealth faces, and the revelation despatched shares hovering instantly.
The corporate’s most up-to-date quarterly report revealed a darkening monetary image, together with a big miss on earnings per share, as prices from medical care proceed to balloon. The corporate was additionally pressured to droop steering because it tries to adapt to the shifting market.
Its monetary woes are removed from the corporate’s solely points, having just lately suffered the sudden departure of its CEO for “private causes.” The departure comes as the corporate faces two Division of Justice (DOJ) probes — one prison and one civil — into its Medicare billing practices.
It is laborious to disagree with the Oracle of Omaha, however there are simply too many points going through UnitedHealth for the time being and with no clear image of an imminent turnaround. I’d avoid the inventory.
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