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CNBC
a day ago
- Business
- CNBC
UnitedHealth shares soar after Warren Buffett's new stake provides a vote of confidence
UnitedHealth shares soared Friday after legendary investor Warren Buffett revealed a significant stake in the troubled insurer. The health care stock popped 12% in morning trading, on track for its best day in five years. UnitedHealth, often viewed as the industry's bellwether, is set to add about 209 points to the Dow Jones Industrial Average at Friday's open. The advance came after Buffett's conglomerate Berkshire Hathaway revealed a stake of 5 million shares, worth about $1.6 billion. The "Big Short" investor Michael Burry and Appaloosa Management's David Tepper also disclosed sizable stakes in the company. Shares of UnitedHealth were down nearly 50% for 2025 through Thursday's close before Buffett's filing. The largest private health insurer has become the face of public blowback in this country against the rising costs of health care. UnitedHealth is currently facing a Justice Department investigation into its Medicare billing practices. In May, the company pulled its annual earnings outlook and CEO Andrew Witty stepped down. Last month, UnitedHealth gave a new 2025 outlook that was well short of Wall Street estimates, hitting the stock further. "The move by Berkshire represents a big vote of confidence in UNH and likely could provide a near-term trading floor for most of the MCO space and, given Berkshire's investment track record, could serve as a near-term bottom and rallying point for other investors that the space is safe to invest in again," George Hill, a health care analyst at Deutsche Bank, said in a note to clients.
CNBC
a day ago
- Business
- CNBC
Why Warren Buffett and other top investors may find troubled UnitedHealth appealing right now
UnitedHealth shares are getting a much needed boost after high-profile investors including Warren Buffett and David Tepper unveiled new stakes in the scandal-plagued insurer. The health care stock popped 10% on Friday, on track for its best day in five years. The advance came after Buffett's conglomerate Berkshire Hathaway revealed a stake of five million shares , worth about $1.6 billion. The "Big Short" investor Michael Burry and Appaloosa Management's Tepper also disclosed sizable stakes in the company. It may come as a surprising move as UnitedHealthcare has become the poster child for problems with the nation's sprawling health-care system. The company recently suffered a string of setbacks , including a suspension of 2025 guidance , the abrupt departure of former CEO Andrew Witty and a Justice Department investigation into its Medicare billing practices. So, why are these top investors buying now? 50% off One unquestionable factor is just how cheap the stock has become. At its peak just nine months ago, shares closed at $615, topping a market capitalization of $500 billion. The stock has now been cut more than half, a rare occurrence for a blue-chip, household name that has been a member of the coveted Dow Jones industrial Average since 2012. "It is available now at a 50% discount. It will probably pay major fines and some executives may be forced to leave the company. But the company will survive and likely regain its prominence in the industry," said David Kass, a finance professor at the University of Maryland who has studied Buffett's methods for a long time. "Its finances are solid. It has above average profitability and a below average price to earnings ratio." UNH 1Y bar UnitedHealth in the past 1-year period Shares of the insurer traded at a price-earnings ratio of just under 12 Thursday, near its lowest in more than a decade. That compared to a 10-year average multiple of 23, according to FactSet data. The healthcare sector is the worst performer among the 11 S & P 500 groupings this year, down nearly 3% as of Thursday's close. "The sector has been under-loved and undervalued for a while," Robert Teeter, chief investment strategist at Silvercrest Asset Management, said on CNBC's "Worldwide Exchange" Friday. "You get some investors that are willing to step in and that creates a sense of momentum. It's an area that has a lot of potential for margin recovery." 'Surmountable' woes? Buffett has a history and reputation of avoiding conflict and controversy when it comes to investing. The last and perhaps the only time Berkshire had an investment embroiled in controversies was Wells Fargo , which conducted fraudulent practices that came to light in 2016. Buffett exited the position 2022. Berkshire's UnitedHealth bet is also an unlikely one given Buffett's longtime distain towards the industry. He previously called the healthcare industry a "tapeworm" on the economy due to its high costs. In 2018, he, along with Jeff Bezos and Jamie Dimon , launched a joint venture to improve health care for their employees and potentially for all Americans, but it was eventually shut down. Still, Buffett's primary focus is always on understanding the business itself, the cost and its long-term potential. Berkshire, with a gigantic footprint in the broader insurance industry, may have special insight into the health insurer. "UNH sports an undeniably cheap valuation but it comes under the cloud of a government investigation and questions about reimbursement levels," said Bill Stone, Glenview Trust Company CIO and a longtime Berkshire shareholder. "Buffett is always interested in strong franchises that he thinks are dealing with surmountable short-term woes and that could be his view here." Long time horizon The size of Berkshire's stake — $1.5 billion — indicated to some that Buffett's two investing lieutenants, Todd Combs and Ted Weschler, were more responsible for this purchase rather than the "Oracle of Omaha" himself. Though, it's probable that Buffett and incoming CEO Greg Abel blessed this move. What sets Berkshire apart from others is its buy-and-hold long-term approach, which could work to its advantage as UnitedHealth seeks to avert its crisis and regain public trust, according to George Hill, a healthcare analyst at Deutsche Bank. "Berkshire clearly has the one attribute many investors do not have, which is duration," Hill said in a note to clients. "While we believe that UNH shares appear attractively valued on a three-plus year time horizon, UNH's next two years could be very choppy from a membership, reimbursement and profitability perspective." UnitedHealth owns the nation's largest and most powerful insurer, UnitedHealthcare, and is often viewed as the industry's bellwether. Wall Street analysts have welcomed with the return of Stephen Hemsley to lead the company again. Hemsley is widely credited as the CEO who transformed the company into the conglomerate it is today. UnitedHealth's 2024 was a particularly tough one. It grappled with the murder of the UnitedHealthcare unit's CEO, Brian Thompson, the torrent of public blowback that followed and a historic cyberattack that affected millions of Americans.
Yahoo
11-07-2025
- Business
- Yahoo
'Big Short' investor Steve Eisman is begging people to stop worrying about the US debt
"Big Short" investor Steve Eisman wants people to stop fretting over the US debt. The 10-year US Treasury yield tells markets the situation is fine, he said. The famed investor said too many people were trying to look for the next "Big Short." Steve Eisman wants people to please stop talking about the US debt. "The Big Short" investor said he was tired of being asked about his outlook for the US debt, and that the budget deficit is probably fine . He said the noise now is probably from people who are trying to replicate the success of investors, including himself, who successfully bet against the housing market in 2008. "You know what I have to say about all this? Just stop. God's sake," Eisman said when asked about the US debt on CNBC this week. "I'm going to say this. Maybe it's a little too obnoxious, but I can't help myself. It's just so — how many times do I get this question? People want to be me. They want to predict the end of the world. And I have news for all of them. The position of Steve Eisman is taken." Eisman, who is best-known for betting against the housing market during the 2008 subprime mortgage crisis, described himself as an optimist. Speaking on the budget deficit, he pointed to the 10-year US Treasury yield, which is the benchmark government bond. This embedded content is not available in your region. The 10-year yield has whipsawed this year amid concerns about President Donald Trump's tariffs and the GOP tax and spending bill, which is expected to add nearly $3 trillion to the deficit over the next decade, according to the Congressional Budget Office. But the yield has been mostly "directionless" when viewed since 2022, Eisman said. That's a sign that the market isn't seriously losing faith in the US fiscal position. "Again, I think the reason is there's no alternative to Treasurys. If there was a real alternative to Treasurys, then all this stuff about the deficit is something I would pay attention to. But because there's no alternative, there's nothing to talk about," Eisman added. Markets have paid close attention to the demand for US Treasurys, as weak demand could signal investors no longer view the bonds as safe-haven assets. But demand at recent Treasury auctions has mostly been strong, including for the latest 10-year Treasury auction on Wednesday. While he's most famous for his bearish call on the housing market leading up to 2008, Eisman has been more upbeat lately. In a previous interview, Eisman said he had de-risked some of his portfolio but remained bullish on markets over the long term, given tailwinds like AI. Read the original article on Business Insider
Yahoo
11-07-2025
- Business
- Yahoo
'Big Short' investor Steve Eisman is begging people to stop worrying about the US debt
"Big Short" investor Steve Eisman wants people to stop fretting over the US debt. The 10-year US Treasury yield tells markets the situation is fine, he said. The famed investor said too many people were trying to look for the next "Big Short." Steve Eisman wants people to please stop talking about the US debt. "The Big Short" investor said he was tired of being asked about his outlook for the US debt, and that the budget deficit is probably fine . He said the noise now is probably from people who are trying to replicate the success of investors, including himself, who successfully bet against the housing market in 2008. "You know what I have to say about all this? Just stop. God's sake," Eisman said when asked about the US debt on CNBC this week. "I'm going to say this. Maybe it's a little too obnoxious, but I can't help myself. It's just so — how many times do I get this question? People want to be me. They want to predict the end of the world. And I have news for all of them. The position of Steve Eisman is taken." Eisman, who is best-known for betting against the housing market during the 2008 subprime mortgage crisis, described himself as an optimist. Speaking on the budget deficit, he pointed to the 10-year US Treasury yield, which is the benchmark government bond. This embedded content is not available in your region. The 10-year yield has whipsawed this year amid concerns about President Donald Trump's tariffs and the GOP tax and spending bill, which is expected to add nearly $3 trillion to the deficit over the next decade, according to the Congressional Budget Office. But the yield has been mostly "directionless" when viewed since 2022, Eisman said. That's a sign that the market isn't seriously losing faith in the US fiscal position. "Again, I think the reason is there's no alternative to Treasurys. If there was a real alternative to Treasurys, then all this stuff about the deficit is something I would pay attention to. But because there's no alternative, there's nothing to talk about," Eisman added. Markets have paid close attention to the demand for US Treasurys, as weak demand could signal investors no longer view the bonds as safe-haven assets. But demand at recent Treasury auctions has mostly been strong, including for the latest 10-year Treasury auction on Wednesday. While he's most famous for his bearish call on the housing market leading up to 2008, Eisman has been more upbeat lately. In a previous interview, Eisman said he had de-risked some of his portfolio but remained bullish on markets over the long term, given tailwinds like AI. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18-06-2025
- Business
- Yahoo
Why 'Big Short' investor Steve Eisman thinks the Israel-Iran conflict is good news for markets
The Israel-Iran conflict could be a positive for the stock market, Steve Eisman says. "The Big Short" investor said it would be a "disaster" if Iran developed and shared nuclear weapons. Eisman thinks markets are now focusing on how the conflict is impeding nuclear proliferation. Famed investor Steve Eisman said sees a silver lining to the conflict between Israel and Iran, which has rattled markets as it stretches into its fifth day on Tuesday. The investor, best-known for his bet against the US housing market preceding the 2008 financial crisis, said he believed developments unfolding between the two nations were potentially "extremely positive" for the stock market and the world. That's because he believes that, had there been no conflict between Israel and Iran this month, Iran would be closer to developing a nuclear weapon, Eisman said. That could result in other countries in the region gaining access to nuclear weaponry or building up nuclear weapons in response, which would have been a "disaster," he told CNBC on Tuesday. "And unfortunately Iran is run by, the only way you can call it is a death cult," Eisman said. "So, getting rid of a death cult anywhere on planet earth, I think, is a very positive thing, especially when that death cult is close to getting nuclear weapons." Eisman said he believed markets have started to digest the positive implications of the conflict. US stocks sank and oil prices spiked shortly after Israel first attacked Iran, but the market reaction has been more muted since, despite tensions creeping higher. US stocks were relatively flat on Tuesday, despite President Donald Trump leaving the G7 summit early to deal with conflict in the Middle East and stating on Truth Social that everyone "should immediately evacuate Tehran." "Now it's focused on it," he said of the latest market reaction to recent developments. "I think it's potentially unbelievably positive." Eisman's comments on conflicts in the Middle East have previously drawn criticism. Last year, Eisman was placed on leave from Neuberger Berman after he posted on X that the world was "celebrating" the death toll in Gaza. Eisman later wrote that the post was a "mistake" and deleted his X account. Eisman added that while the Israel-Iran conflict could ultimately be a positive for markets, the potential for a wider trade war from Trump's tariffs is one big thing he's worried about. "If we reach deals with all these countries and there's no trade war, I'm very positive on the US economy long-term, and I would be very positive on the market. If there's a trade war, chances are we go into a global recession," he said. Read the original article on Business Insider
