Call it the ‘Oracle of Omaha’ touch. Shares of the beleaguered UnitedHealth Group rose by nearly 12 per cent to over US$300 on Friday after Warren Buffett’s Berkshire Hathaway revealed that it bought 5.04 million shares worth US$1.57 billion in the insurance company.
It was a typical Buffett move, buying into a company when others sold. The shares were trading at US$630.73 on November 11 but had fallen to as low as US$234.6 on 1 August this year.
UnitedHealth shares closed Thursday at US$271.49. Valued at $246 billion by market cap, it maintains its position as America’s largest health insurer. Despite the headwinds, the company has maintained its quarterly dividend of US$2.21 per share.
On Friday, the company experienced its best daily performance since March 2020, ending the day at US$304.01 after reaching a day high of US$310.3.
According to a filing on Thursday. Berkshire Hathaway also sold its US$1 billion stake in T-Mobile US during the period, completely exiting the telecommunications operator.
Buffett’s company again trimmed its holdings in Apple and Bank of America. It sold 20 million shares of Apple during the period. Berkshire’s Apple stake remains its largest equity stake by market value, despite it falling by about US$9.2 billion in the three months ended June 30. The company also sold 26 million BofA shares, bringing its stake down to about 8 per cent.
Last year, in December, UnitedHealth’s Chief Executive, Brian Thompson, was shot to death in Manhattan after facing criticism, especially from student groups, for rejecting insurance claims. The company is currently facing a Justice Department investigation into its medicare billing practices.
In April, the company reported earnings below Wall Street estimates for the first time in more than a decade, sending the stock price plummeting further.
Berkshire tweaked its investment in US homebuilders, building its stake in Lennar Corp and selling shares of DR Horton Inc. The company also bought more shares of steel manufacturer Nucor. Those changes were omitted in a previous filing as the company requested confidentiality treatment from the SEC.
Shares of Nucor jumped nearly 8 per cent in afterhours trading, while Lennar and DR Horton were up about 3 per cent each.
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