UnitedHealth Shares Fall 25% in Worst Monthly Sell-Off Since 2009
June 2 - UnitedHealth Group (NYSE:UNH) shares slid nearly 25% in May, marking the steepest monthly drop since 2009, as regulatory worries and a leadership shakeup weighed on the managed care giant.
Warning! GuruFocus has detected 4 Warning Sign with UNH.
The selloff began May 12, when UNH dipped alongside rivals Cigna (NYSE:CI) and CVS Health (NYSE:CVS) after former President Donald Trump revived his most-favored-nation policy aimed at lowering U.S. drug prices and threatened to knock out pharmacy benefit managers.
A day later, UNH pulled its 2025 outlook as Chairman Stephen Hemsley stepped in after former CEO Andrew Witty's abrupt resignation. Witty, who had led the company through a challenging stretch including the December murder of insurance unit CEO Brian Thompson, exited amid mounting pressure.
On May 14, The Wall Street Journal reported a Department of Justice criminal probe into potential Medicare fraud, sending UNH shares down about 11%. Then, on May 21, The Guardian alleged the company paid nursing homes to secure Medicare enrollees, pushing the stock to fresh lows.
Despite negative headlines, insiders bought over $32 million in UNH stock in May. Hemsley alone purchased $25 million on May 16. While firms such as Bank of America, TD Securities, and HSBC downgraded UNH, some analysts argue the downturn may present a buying opportunity.
This article first appeared on GuruFocus.
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