UnitedHealth surges after Warren Buffett bets on recovery
The shares have lost nearly half their value in the last year as the company struggled to adapt to rising healthcare costs and changes to government reimbursement plans that affected its health insurance and Optum patient care businesses.
News of Buffett's stake, along with purchases by other large hedge fund managers, suggests investors believe the stock currently does not reflect its long-term outlook. However, the turnaround may be slow, as UnitedHealth reckons with billions of additional medical costs expected to hit in the coming quarters.
The "vote of confidence" from Buffett validates UnitedHealth's long-term value, but "(the) management needs to regain trust and credibility with investors, and get back to its beat-and-raise reputation of the past," said James Harlow, senior vice president at Novare Capital Management.
UnitedHealth missed Wall Street's earnings target for two straight quarters this year and was forced to pull back its 2025 outlook in May, rare moves for a company that had long been favored for its regular earnings growth. It reinstated the annual outlook last month, but the profit forecast was well short of analysts' already lowered estimate.
The company's shares currently trade at about 15.8 times forward earnings estimates, below their five-year average of 19.
The stock has dropped nearly 40% in 2025, making it the worst-performing stock on the blue-chip Dow Jones Industrial Average (.DJI), opens new tab this year.
Friday's gains helped the Dow hit an all-time intraday high, while shares of rivals Humana (HUM.N), opens new tab, Elevance Health (ELV.N), opens new tab and CVS Health (CVS.N), opens new tab rose more modestly.
"I'm a bit surprised at the magnitude of the stock move today but that shows how beaten up and out of favor the stock and entire health insurance sector is," Jeff Jonas, portfolio manager at Gabelli Funds said.
In the last two years, the company has dealt with fallout from a cyberattack at its technology unit that served as a major backbone in the U.S. healthcare system, the murder of its insurance unit chief in December, and a federal investigation into its government-backed health plans.
In May, CEO Andrew Witty abruptly resigned in the face of the worsening operational issues, and Stephen Hemsley, who had run the company from 2006 to 2017, took over.
Buffett is known as a patient and opportunistic investor, swooping in with big investments in companies during periods of struggle when he sees a long-term strategic value.
He invested heavily in Occidental Petroleum (OXY.N), opens new tab in 2019 as it tried to finance a merger with Anadarko Petroleum and has kept adding to his stake despite the company's weak stock performance. He famously took a stake in investment bank Goldman Sachs (GS.N), opens new tab at the height of the global financial crisis in 2008.
"Buffett's purchase is a psychological reassurance to many investors that saw UnitedHealth as 'untouchable,' given the massive turbulence in the stock over the past few months," said Kevin Gade, chief operating officer at UnitedHealth investor Bahl & Gaynor.
Berkshire said in a U.S. Securities and Exchange Commission filing on Thursday that it owned 5.04 million UnitedHealth shares, worth about $1.57 billion, as of June 30. Buffett owned about 1.18 million shares in UnitedHealth between 2006 and 2009, before selling his entire stake in 2010.
Several other prominent hedge funds, including David Tepper's Appaloosa Management, Lone Pine Capital and Two Sigma Investments, also bought UnitedHealth's shares, regulatory filings showed on Thursday.
"While UnitedHealth still faces elevated uncertainty, it is good to see that this renowned investment firm also believes the market is discounting assumptions that are too pessimistic for the long term," said Morningstar analyst Julie Utterback.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
an hour ago
- The Guardian
Air Canada flight attendants to defy back-to-work order and remain on strike
Air Canada's flight attendants plan to remain on strike, their union has said, defying government efforts to force them back to work and into binding arbitration over a dispute that has left more than 100,000 travellers stranded around the world during the peak summer travel season. About 10,000 flight attendants who work for Canada's largest airline walked out on the job early on Saturday amid an increasingly bitter dispute over what the union has described as 'poverty wages' and unpaid labour. Around the same time, Air Canada, which operates about 700 flights a day, said it would begin locking flight attendants out of airports. Less than 12 hours later, the Canadian government said it had ordered an end to the work stoppage, leading Air Canada to announce plans to resume flying by Sunday evening. However, that timeline was thrown into question after the union told Reuters it would challenge the return-to-work order, which it described as unconstitutional. It was the latest twist in talks that have dragged on since March as the flight attendants seek to address the fact that they are not compensated for work carried out when planes are not in the air, whether it is time spent on the ground between flights and or helping passengers to board. On Saturday, Canada's federal jobs minister, Patty Hajdu, said it was clear the talks had reached an impasse and that the impact was being felt by Canadians and visitors across the country. 'The talks broke down,' said Hajdu as she told reporters that she had asked the Canada Industrial Relations Board to order an immediate end to the strike and to impose binding arbitration. 'It is clear that the parties are not any closer to resolving some of the key issues that remain and they will need help with the arbitrator.' She appeared to link her actions to the toll that US tariff increases had taken on the Canadian economy. 'In a year in which Canadian families and businesses have already experienced too much disruption and uncertainty, this is not the time to add additional challenges and disruptions to their lives and our economy,' she said in a statement. Hajdu's power to halt the strike stems from a section of the Canada Labour Code, which gives the minister unilateral authority to end work stoppages in order to 'maintain or secure industrial peace'. While the section was rarely used by previous governments, the Liberal government has invoked it several times in the past year, quelling strikes by workers at Canadian ports, the post office and railway companies, prompting analysts to voice concerns that the use of the clause may be undermining workers' rights. The union representing the flight attendants decried the Liberal government for stepping in within hours, accusing it of violating their right to take job action. Air Canada had reportedly previously requested that the government intervene to impose binding arbitration. Wesley Lesosky, of the Canadian Union of Public Employees, said the government was giving 'Air Canada exactly what they want – hours and hours of unpaid labour from underpaid flight attendants, while the company pulls in sky-high profits and extraordinary executive compensation'. According to the aviation analytics firm Cirium, the airline had cancelled 671 flights by Saturday afternoon, leaving some travellers stranded overseas and others scrambling to find alternatives during the busy summer travel season. About 130,000 customers a day could be affected by a disruption, according to the airline. The airline said earlier it had offered its flight attendants 'an increase of more than 38% on global compensation', but the union said the figure failed to fully account for inflation. Air Canada also said it was willing to pay flight attendants 50% of their wage for work done before planes take off, leading the union to reply that its members should be fully compensated for their labour. About 70% of the airline's flight attendants are women, said Natasha Stea, a local union president and flight attendant. She questioned whether they were being treated fairly, given that Air Canada pilots, the vast majority of whom are men, received a significant raise last year. 'We are heartbroken for our passengers,' she told the Associated Press late last week. 'Nobody wants to see Canadians stranded or anxious about their travel plans, but we cannot work for free.'
Geeky Gadgets
an hour ago
- Geeky Gadgets
Google Pixel 10 Pro XL Price Leaks: How Much Will it Cost?
Google is expected to officially announce that the Pixel 10 series, including its flagship model, the Pixel 10 Pro XL, will retain the same pricing structure as the previous Pixel 9 lineup. This decision is particularly noteworthy in a smartphone market where flagship prices have been steadily increasing. By maintaining stable pricing, Google positions itself as a competitive force, offering premium features without imposing higher costs on consumers. This approach reflects a deliberate strategy to balance innovation with affordability, making sure that innovative technology remains accessible to a broader audience. Watch this video on YouTube. Pixel 10 Series: Pricing That Defies Market Trends The Pixel 10 series consists of four models: Pixel 10, Pixel 10 Pro, Pixel 10 Pro XL, and Pixel 10 Pro Fold. Unlike many competitors who have raised prices in response to rising production costs and inflation, Google has chosen to keep its pricing consistent with last year's lineup. This decision underscores Google's commitment to providing value without compromising on quality or features. In the US, the Pixel 10 starts at $799 for the 128GB variant, while the Pixel 10 Pro XL begins at $1,199 for the 256GB model. This pricing strategy ensures that you can access premium features and advanced technology without the financial burden often associated with flagship devices. By resisting the industry trend of price hikes, Google appeals to both loyal customers and new buyers seeking high-quality smartphones at reasonable prices. Global Pricing and Regional Adjustments Google's pricing strategy reflects a careful balance between global consistency and regional market dynamics. While the company maintains a uniform pricing structure across major markets, it also accounts for local economic factors such as currency fluctuations and purchasing power. This approach ensures that the Pixel 10 series remains competitively priced worldwide. In the US, the Pixel 10 Pro Fold, the most premium model in the lineup, is priced at $1,799 for the 256GB variant. for the 256GB variant. European markets follow a similar pricing alignment, making sure that the Pixel 10 series remains accessible and competitive across regions. This transparent pricing strategy not only enhances accessibility but also reinforces Google's reputation as a customer-focused brand. By addressing regional market needs without compromising on quality or features, Google strengthens its global presence in the premium smartphone segment. Storage Options Designed for Every User The Pixel 10 series offers a variety of storage configurations to meet the diverse needs of its users. This tiered approach ensures that you can select a model that aligns with your specific requirements, whether you prioritize affordability or need additional storage for professional tasks and media. The Pixel 10 and Pixel 10 Pro start at 128GB , making them ideal for users with moderate storage needs, such as casual app usage and photo storage. , making them ideal for users with moderate storage needs, such as casual app usage and photo storage. The Pixel 10 Pro XL and Pixel 10 Pro Fold begin at 256GB, catering to users who require more space for apps, high-resolution media, and professional workflows. By offering multiple storage options, Google provides flexibility without forcing users to compromise on essential features. This thoughtful approach ensures that the Pixel 10 series appeals to a wide range of consumers, from casual users to tech enthusiasts and professionals. Challenging Market Trends with Strategic Pricing Google's decision to maintain stable pricing for the Pixel 10 series stands in stark contrast to the broader industry trend of rising flagship smartphone costs. Many manufacturers justify price increases by citing advanced features, higher production expenses, and inflation. However, Google has taken a different path, prioritizing affordability while continuing to deliver innovative features and premium build quality. This strategy not only strengthens Google's position in the competitive premium smartphone market but also resonates with price-conscious consumers who seek value without sacrificing performance. By offering flagship-level features at consistent prices, Google challenges the notion that innovative technology must come with a hefty price tag. This approach positions the Pixel 10 series as a compelling choice for those who demand both quality and value. A Balanced Approach to Premium Smartphones The Pixel 10 series, led by the Pixel 10 Pro XL, exemplifies Google's commitment to delivering a balanced combination of affordability, innovation, and market competitiveness. By retaining last year's pricing structure, Google sets a new benchmark for value in the flagship smartphone segment. Whether you are in the US, India, or Europe, the Pixel 10 lineup offers consistent pricing and advanced features, making it a strong contender in today's premium smartphone market. With its transparent pricing strategy, diverse storage options, and focus on accessibility, the Pixel 10 series redefines what consumers can expect from a flagship smartphone. Google's approach not only challenges industry norms but also ensures that premium technology remains within reach for a wide audience, solidifying its position as a leader in the evolving smartphone landscape. Browse through more resources below from our in-depth content covering more areas on the Google Pixel 10 Pro XL. Google Pixel 10 Pro XL Leak: Specs, Features, and Release Date Google Pixel 10 Pro XL: Specs, Features, and Release Details Google Pixel 10 Pro XL Launch Date, Features, and More Google Pixel 10 Pro XL: Specs, Features, and More Google Pixel 10 Pro XL Features, Specs, and Pricing Leaked Source & Image Credit: Demon's Tech Filed Under: Android News, Mobile Phone News, Top News Latest Geeky Gadgets Deals Disclosure: Some of our articles include affiliate links. If you buy something through one of these links, Geeky Gadgets may earn an affiliate commission. Learn about our Disclosure Policy.
Daily Mail
an hour ago
- Daily Mail
Historic red state town with Victorian charm faces population boom
Once celebrated for its historic Victorian architecture and small-town charm, Clarksville, Tennessee , is now grappling with the growing pains of being one of the fastest-expanding cities in America. The population of the military town that sits close to Fort Campbell on the border with Kentucky has soared past 186,000. This is a jump of nearly 20,000 in just four years - but the housing market hasn't kept pace, driving prices sky-high and leaving many locals struggling to find a place to live. A new housing study warns that the shortage spans both rental and for-sale properties, with limited supply and a lack of variety in available homes. The squeeze is forcing some residents to spend a disproportionate share of their income on housing, cutting into local spending and threatening long-term economic stability. City officials acknowledge the problem, but the scale of Clarksville's growth has left them scrambling to balance development with infrastructure needs while preserving the historic charm that draws people here in the first place. Council member Deanna McLaughlin called the situation 'urgent', pointing to a severe five-year housing gap of more than 15,000 units - including 8,595 for-sale homes and 6,598 rentals across all price points - and noted that both affordable and market-rate rentals are nearly at full occupancy. 'Limited options and rising costs are creating a significant cost burden for residents,' she said. 'We're seeing 43.6 percent of renters and 20 percent of homeowners spending more than 30 percent of their income on housing, which is above the state average. Incomes simply aren't keeping pace with the cost of living .' Local real estate agent Tyler Forte, who services Clarksville from his base in Nashville, says the city has undergone a dramatic transformation in just a few years. 'Even three years ago, Clarksville was kind of Nashville's stepsister - known mainly for the military base and university, with a lot of farmland and a small-town feel,' Forte said. 'Since COVID, it's just absolutely taken off. They're building a ton of homes and commercial projects, new grocery stores, and even two new hospitals. It's gone from being an afterthought to a major city in Tennessee.' Much of that growth, Forte says, has been driven by both out-of-state buyers and Nashville residents seeking a lower cost of living. 'As Nashville prices have climbed, I've had a lot of clients who've moved to Clarksville for more affordable housing,' he explained. Forte notes that new construction dominates the market, which can be a double-edged sword. 'Most of the homes I see in Clarksville are brand new - even something built in 2015 is considered old. Builders are offering big incentives, like interest rate buy-downs through their preferred lenders. One client just locked in a 3.99 percent rate through Lennar's in-house lending program - a huge drop from the 6.5-7 percent you'd see with a typical lender. 'Because the builder owns the lender, they can offer aggressive financing deals that make new construction especially attractive,' he said. While bidding wars aren't as common as they once were, Forte says competition still exists for certain properties. 'If a home is unique, move-in ready, and priced right, it can still spark multiple offers. But out of the 80 homes I sold in the past year, only about three had bidding wars.' Some parts of the city remain hotter than others. 'The Sango area in the south is the most competitive,' Forte said. 'It's closer to Nashville, has a strong school district, and that combination is always going to drive demand.' However, Forte doesn't believe the real shortage is in housing stock. 'They're building as fast as they possibly can,' he said. 'The bigger issue is infrastructure. This was mostly farmland 10 years ago, and the public systems just aren't built to handle this kind of population growth so quickly.' Although the boom has brought new businesses and job opportunities, it has also fueled concerns about traffic congestion, rezoning battles, and environmental impacts in a city where Victorian-era streets and landmarks now sit in the shadow of sprawling new subdivisions. McLaughlin said younger residents and first-time buyers are especially hard-hit, with many unable to qualify for mortgages and a shortage of smaller 'starter' homes in the market. She warned that building quickly without careful planning could worsen traffic congestion, strain public services, and erode the character of historic neighborhoods. 'If the housing shortage persists, the most pressing concerns would be an increase in the number of cost-burdened residents, particularly those in lower- and middle-income brackets,' she said. 'That could lead to the departure of essential workers and drive prices even higher,' she added. Patrick Bowen, president of Bowen National Research, led the assessment that laid bare Clarksville's housing shortage - and its wider economic consequences. 'Whether it's rental or for-sale housing, there's not much available,' Bowen told local FOX affiliate WZTV Nashville. 'And what you do have is really not affordable for many low- to moderate-income households.' He warned that rising housing costs don't just hit residents - they ripple through the local economy. 'When you've got people spending exorbitant amounts on housing, that's less money going back into the local economy. It has an impact on employers, too; the workforce can't afford to stay in the market, or afford the rent they're paying.' Bowen says the newly compiled data can help Clarksville plan smarter: 'Now you have data to look to, so when you're setting priorities and goals, you have something that gives you structure, to say, we need to focus on this type of housing or this population.' He also stressed that rushing development could make matters worse. 'Yes, housing is needed quickly, but that doesn't mean it should be rushed. You want to make sure you're building the right kind of housing, in the right places, with the right infrastructure in place.'
