UnitedHealth soars but Berkshire’s new stake may still be in the red

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UnitedHealth Group shares have soared nearly 30% since Berkshire Hathaway’s disclosure in mid-August that it had purchased a bit more than 5 million shares between April 1 and June 30.

Minutes earlier than that SEC filing, UNH closed at $271.49. On Friday, it ended buying and selling at $352.51.

Although UNH had already began to bounce from its lowest shut of the 12 months of $237.77 on Aug. 1, Berkshire’s endorsement of the troubled inventory is accountable for a minimum of a large chunk of its current positive factors.

It shouldn’t be clear, nonetheless, whether or not Berkshire’s funding is worthwhile (on paper) at this level.

The present value is up simply 13.0% since its $311.97 shut at the finish of Q2 on June 30.

We do not know precisely when Berkshire did its shopping for throughout the second quarter, so we will solely take a look at a variety of potential buy costs.

(And, in fact, it may have continued to purchase in the third quarter. We will not find out about that till mid-November.)

At Q2’s excessive of $606.36 per share, Berkshire would have paid $3.1 billion for its stake, placing it 42% into the red.

At the low of $248.88, the 5 million shares would have price lower than $1.3 billion, giving it a 42% achieve.

Using the common shut for the interval, the value comes in at $1.9 billion. Today’s worth of $1.8 billion is round 8% beneath that degree.

Since Berkshire’s shopping for was presumably triggered by the value slide early in the quarter, the precise buy value might be at the decrease finish of the vary, but there still seems to be a major probability the stake is the red, regardless of the inventory’s current positive factors.

Berkshire & Co., nonetheless, are often in it for the lengthy haul, and there are some bullish indicators for the inventory, which is still down 30% 12 months so far.

After assembly with UNH’s administration, analysts at Morgan Stanley stated, “We are incrementally positive following discussions with UNH [management] where it had conviction in the turnaround.”

On Friday, Morgan Stanley’s Erin Wright raised her value goal to $395 from $325.

And on Tuesday’s “Lightning Round,” CNBC’s Jim Cramer stated he would not like to purchase shares which might be under investigation, but “there are some people who seem to know that the worst is over.”

In an uncommon transfer for the usually passive investor, Buffett told CNBC he’s “disappointed” the company went ahead with those plans, although it knew he, representing KHC’s largest shareholder, opposed a cut up.

CNBC.com’s Yun Li quotes Gordon Haskett’s Don Bilson as saying, “Beyond any worries that investors might have with the plan itself, they must also grapple with the possibility that Buffett will now dump his stock.”

Because its stake is greater than 10%, any gross sales must be reported publicly inside two enterprise days.

While the value of Berkshire A shares, the supply of just about all his internet value, elevated nearly 10% over the previous 12 months, Buffett donated inventory then worth $6.0 billion this summer to the Gates Foundation and a number of other household foundations.

Last fall, his Thanksgiving items to the household foundations totaled $1.1 billion.

If Buffett had held onto all the shares he is given away since 2006, he would now be value roughly $350 billion.

That would put him in the #2 slot behind Elon Musk’s $428 billion on the annual listing, which makes use of inventory values as of Sept. 9.

The subsequent day, Oracle shares soared on a strong earnings report, including round $100 billion to Larry Ellison’s internet value. Tesla shares have additionally moved greater since then.

As a end result, Buffett would be almost tied with Ellison’s $352 billion in our hypothetical real-time rating, with Musk still effectively forward at $463 billion.

Holdings are as of June 30, 2025 as reported in Berkshire Hathaway’s 13F filing on August 14, 2025, aside from:

The full listing of holdings and present market values is out there from CNBC.com’s Berkshire Hathaway Portfolio Tracker.

Please ship any questions or feedback about the e-newsletter to me at [email protected]. (Sorry, but we do not ahead questions or feedback to Buffett himself.)

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Also, Buffett’s annual letters to shareholders are extremely advisable studying. There are collected here on Berkshire’s website.

— Alex Crippen, Editor, Warren Buffett Watch