Legendary investor Warren Buffett may have shocked some investors when he revealed a stake in health insurance company UnitedHealth Group Inc (NYSE:UNH). While shares of the insurance company are down year-to-date, Buffett has helped Berkshire Hathaway Inc (NYSE:BRK)(NYSE:BRK) post an impressive gain since the end of the second quarter.
UNH shares are trending higher. Check the fundamentals here.
Warren Buffett, Berkshire Hathaway Bet On UnitedHealth
The end of the second quarter saw 13F filings from fund managers and hedge funds with multiple filings revealing stakes taken in the beaten-down insurance company.
Berkshire Hathaway revealed a stake of 5,039,564 shares in UnitedHealth Group in the second quarter.
It is unknown when the Buffett-led company bought UnitedHealth stock or how much it paid. The stock hit its 52-week lows during the second quarter.
News of Buffett's stake sent shares higher and the stock has been moving higher since.
UnitedHealth stock closed at $311.97 on June 30, making the Berkshire Hathaway stake worth $1,572,192,781.08 at the time.
Based on a price of $370.59 for UnitedHealth stock on Wednesday, the stake is now worth $1,867,612,022.76.
This means that since the end of the second quarter, Berkshire's stake is up $295.42 million.
Buffett's Strategy
Betting on out-of-favor stocks isn't new to Buffett and could be part of the reason why he has a history of beating the S&P 500.
Berkshire Hathaway shares were up 27.1% in 2024, beating the SPDR S&P 500 ETF Trust (NYSE:SPY), which was up 14.85% year-to-date. The conglomerate has beaten the S&P 500 in three of the last four years and in 11 of the past 20 years.
Year-to-date, Berkshire Hathaway is up 10.12%, underperforming the gain of the S&P 500.
Freedom Capital Markets Chief Market Strategist Jay Woods told Benzinga that the latest 13F from Berkshire Hathaway shows the conglomerate is taking some positions in stocks and sectors that could provide opportunity.
“I thought that 13F was interesting,” Woods told Benzinga.
Woods said the latest purchases could show the new leadership of Berkshire Hathaway with Buffett stepping down from his CEO role at the end of the year.
The market strategist highlighted that Buffett and late Berkshire chairman Charlie Munger didn’t take small positions in stocks.
While the UnitedHealth stake news caused the stock to jump, Woods said the position is small relative to past Berkshire investments.
Woods said he’s a fan of Berkshire getting involved in sectors that are beaten down, including the UnitedHealth position, which could be in the midst of a turnaround.
“It will take time.”
The market strategist said a key question is if Berkshire will unveil future investments in UnitedHealth in new 13Fs or if future filings will show selling the stake and taking quick profits.
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