Zacks Investment Ideas feature highlights: UnitedHealth Group
Chicago, IL – May 20, 2025– Today, Zacks Investment Ideas feature highlights UnitedHealth Group UNH.Zacks Rank #5 (Strong Sell) stock UnitedHealth Group is the largest health insurance company in the United States. UNH, which generated ~$400 billion in revenue last year, provides a variety of health care products and services, including health maintenance organizations (HMOs), point of service plans (POS), preferred provider organizations (PPOs), and managed fee-for-service programs. Meanwhile, the company boasts the largest and most diverse membership base within the managed-care organization market, giving it significant competitive advantages. Through several strategic acquisitions, UNH has transformed from a pure health insurer to a comprehensive healthcare provider.
Until recently, UNH stock was a model of resilience. Over the past year, however, UNH has had to weather a monumental storm of headwinds including a spike in medical costs and expenses, a cyber-attack, and the murder of UNH health insurance unit CEO Brian Thompson (and some of the backlash that came with it).
Despite the barrage of negative news headlines, UNH shares traded just shy of all-time highs as early as last month. However, UNH shares have been destroyed since then, plunging more than 50% in a month and marking the healthcare juggernaut's worst drawdown since the Great Financial Crisis of 2008.
While the price action was firm until recently, investor confidence was rattled and shares unraveled rapidly after the unexpected departure of CEO Andrew Witty, a Medicare investigation into UNH, and suspended earnings guidance.
With negative news reaching a fever pitch, shares plunging, and investor fear rising, is now the time to buy shares of UNH?
Heavy insider buying in a short period is one of the best "tells" savvy investors can observe for a prospective stock. Last week, UNH insiders put their money where their mouth is and bought a sizable amount of stock.
The latest insider trading disclosure shows that returning CEO Stephen Hemsley, who had a previous and successful stint as UNH CEO from 2006 to 2017, bought $25 million worth of shares on Friday, May 16th. Meanwhile, UNH President and CEO John F Rex accumulated nearly $5 million worth of UNH while three directors also looked to take advantage of lower stock prices. Such concentrated insider buying leads me to believe that insiders are confident that the company's issues will be resolved – and possibly soon.
"Google Trends" analyzes the popularity of search queries on the internet. The term "Short UNH" has spiked to its highest levels in history. Previous spikes have marked significant intermediate bottoms in the stock.
The UNH daily chart illustrates significant signs of downside exhaustion, including a hammer reversal candle, extreme volume (the highest since the Great Financial Crisis), and a near-maximum oversold reading.
Though UnitedHealth Group faces a barrage of negative news, recent heavy insider buying and technical indicators suggest peak pessimism and a potential bottom in the stock.
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