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CNBC
3 days 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.
Newsweek
19-05-2025
- Business
- Newsweek
Americans' View of the Economy Reverses Four-Year Trend in New Poll
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. A majority of Americans view the state of the economy as "strong" for the first time in nearly four years, according to a new Harvard University/HarrisX poll. Why It Matters The poll marks the first time in years that optimism has outpaced pessimism on the economy in one of the pollster's surveys, representing a significant reversal in public sentiment during a period of inflation, interest rate hikes and pandemic aftershocks. A stronger view on the economy could reshape consumer spending and investment confidence after years of turmoil caused by the COVID-19 pandemic. A return to net-positive views of the U.S. economy could have political implications for President Donald Trump, whose administration has faced criticism over some of his economic policies such as tariffs. What to Know The poll, conducted by the Harvard University Center for American Political Studies and HarrisX, found that a slim majority of Americans now view the economy as strong. Fifty-one percent of respondents said they view the economy as strong, while 49 percent view it as weak. While this represents a small majority, it is the first time more Americans than not view the economy a strong since July 2021, according to the pollster. The COVID-19 pandemic sparked a global economic slowdown due to lockdowns aimed at preventing the spread of the deadly virus, and the years that followed have seen high rates of inflation both in the U.S. and abroad as leaders tried to set an economic recovery. In the U.S., inflation peaked in June 2022 and has steadily fallen since, according to the Bureau of Labor Statistics. But prices have not returned to pre-pandemic levels. Other metrics like housing prices remain high. The average price of a house in the first quarter of 2025 was $503,800; this compares to $383,000 in the first quarter of 2020, according to the Federal Reserve Bank of St. Louis. The new poll also asked respondents about their views on Trump's economic policies. It found that Americans were split on whether his policies are making the economy stronger or weaker, with 50 percent of respondents giving each answer. Traders work on the floor of the New York Stock Exchange in New York City on May 19, 2025. Traders work on the floor of the New York Stock Exchange in New York City on May 19, regards to tariffs, 57 percent of respondents said tariffs are harming the economy, while 43 percent said they are boosting the economy. The poll surveyed 1,903 registered voters from May 14 to May 15, 2025 and had a margin of error of plus or minus 2.2 percentage points. The Dow Jones industrial Average, a key stock market metric, was up just under one percent compared to the start of the year on Monday. It has continued to rise in recent weeks after Trump delayed many of his tariffs amid market backlash. Last week, however, Moody's Ratings downgraded the U.S. government's credit rating for the first time in more than a century. What People Are Saying Dritan Nesho, CEO of HarrisX and co-director of the Harvard CAPS/ Harris poll, told Newsweek: "Views around the direction of the economy and the country improved drastically after Trump's election and only dipped in April as he disrupted markets by levying widespread tariffs that voters think went too far. If you put the tariffs to the side, the trend is clear: despite all the disruption Americans are feeling they're better off financially and this reflects inflation, their key economic issue, actually dropping to 2.3% in April, very close to the 2% target rate. Therefore, when it comes to the tariffs and the economy, Trump appears to be his own worst enemy. " Asked when the U.S. economy will become solely his responsibility, President Trump, told NBC News earlier in May: "It partially is right now. And I really mean this. I think the good parts are the Trump economy and the bad parts are the Biden economy because he did a terrible job on everything. Ultimately, I take responsibility for everything," he added. "But I've only just been here for a little more than three months." Democratic pollster Matt McDermott previously told Newsweek: "The challenge for Trump is that tariffs don't hit all at once. They take a few months to ripple through the supply chain." What's Next The Harvard-Harris finding will likely be tested in coming months by key economic indicators: updated inflation reports, GDP revisions, and the Federal Reserve's next move on interest rates. The economy will remain a major issue for voters heading into the 2026 midterms next year, as well as the New Jersey and Virginia gubernatorial races later this year, which will be a major test of Trump's popularity.
Yahoo
25-04-2025
- Business
- Yahoo
Stock Market Today: Stocks end higher on hope for China trade deal, Trump's Fed remark
Updated at 4:35 p.m. by Rob Lenihan Stocks finished higher Wednesday, boosted by the possibility of trade talks and President Donald Trump's pledge not to remove Federal Reserve Chairman Jerome Powell. The Dow Jones Industrial Average surged 419.59 points, or 1.07%, to finish the session at 39,606.57, while the S&P 500 gained 1.67% to close at 5,375.86, and the tech-heavy Nasdaq climbed 2.50% to end the day at 16,708.05. Louis Navellier, chairman and founder of Navellier & Associates, noted that Trump said in a news conference that the final tariffs on China will be lower than they are currently and added that if China and the U.S. cannot agree, he may still lower key tariffs. Trump predicted that the final tariff on China would not be 'anywhere near' the 145% level he has set and added that 'we're going to be very nice.' "The stock market is a manic crowd that likes to react first and think second," Navellier said. "It is now time to think and prosper during another spectacular earnings announcement season." "Spring has arrived, and consumers are increasingly getting out and about, which is why the strongest retail sales in two years just occurred," he said. "So, I want you to be like our Treasury Secretary, Scott Bessent, and 'Do Not Worry, Be Happy.' 3:42 p.m. Stocks were holding onto sizable gains Wednesday as many investors cheered the possibility trade talks between the United States might at least start. At the same time, President Trump's announcement he wouldn't try to remove Federal Reserve Chairman Jerome Powell cheered the market, too. The market's gains came despite a report from the Federal Reserve that uncertainty about international trade was pervasive across the country. At 3:40 p.m. ET, the Standard & Poor's 500 index was up 1.3% at 5,350. The Dow Jones industrial Average was up 330 points, or 0.9%, to 39,525. The tech heavy Nasdaq Composite Index was up 2.2% to 16,654.54. The index was led by such stalwarts as Tesla () , () and Nvidia () . The Fed's Beige Book report, compiled by the Fed's 12 regional banks, noted deep uncertainty about tariffs and the state of the economy. The Cleveland Fed noted consumers were buying new vehicles now to get ahead of tariffs. The China talk started Tuesday when Treasury Secretary Scott Bessent said the tariff situation with China was unsustainable. The U.S. is imposing tariffs of up 145% on some Chinese imports. Then, the president said he might consider knocking the tariffs down to something around 50%. There were thoughts he might make the cut unilaterally. The White House said there would be no unilateral cuts. Meanwhile, China was content to wait. "Our doors are open, if the U.S. wants to talk," a statement from the Chinese embassy said on Wednesday. "If a negotiated solution is truly what the U.S. wants, it should stop threatening and blackmailing China and seek dialogue based on equality, respect and mutual benefit. CEOs from three giant companies appear to have played a role in getting the President to tone down his tariff talk. The trio, from Walmart () , Target () , and Home Depot () , "did not mince words" about what might occur if the tariff issues doesn't get resolved, according to an Axios report. The executives met with Trump Monday afternoon and told him warned him that his tariff and trade policy could disrupt supply chains, raise prices and empty shelves, according to sources familiar with the meeting. While retail prices aren't rising now, the trio said price increases will start to hit in perhaps two weeks. Gold hit $3,509 an ounce in early Tuesday trading and then fell back. The metal was falling again Wednesday, to $3,313 an ounce in New York, down $105. The runup to $3,500 had all the characteristics of a bubble waiting to burst, and it did. Gold stocks were lower. Newmont NEM, one of the biggest U.S.-domiciled producers was down 2.3% to $53.27. Crude oil, meanwhile, was down $1.57 a barrel to $62.12 a barrel in New York. Brent crude, traded in London, was down $2.50 to $64.94. AAA's national gas price was $3.171 a gallon on Wednesday, up from $3.166 on Tuesday. Stocks soared at the open Wednesday for a second day in a row as investors cheered President Donald Trump's comments that he hoped a trade deal with China could negotiated soon. The rally retreated from frenzied levels when it became apparent a deal wasn't remotely close and might take weeks or months — once the United States and China actually started to negotiate. 💰💸 💰💸 The question is who wants a deal more. A Chinese official in Beijing said, "The door to talks is wide open." At the same time, President Trump said he wouldn't be firing Federal Reserve Chairman Jerome Powell (which might not be legally possible). That also cheered investors. At 1:45 p.m. ET, the Dow was up about 39,667, up 480 points but down from a gain of nearly 1,200 points reached soon after the open. The Standard & Poor's 500 Index was up 2% to 5,392. The Nasdaq Composite Index was up 3% to 16, () shares were higher after CEO Elon Musk said he would be reducing his time with the Trump Administration in the next month or so and and concentrate more efforts on the company. Shares of both companies were higher. Boeing was up 5.7% to $171.70. Tesla jumped 6.8% to $ net income slid 71% in the first quarter, as the company struggled to overcome competitive pressures, especially overseas and a reputational hit from Musk's polarizing role in the Trump administration. On a more somber note, Bloomberg News reported that Intel () would be announcing job cuts of as much as 20% as the legendary chip maker tries to stabilize its business. The announcement was reportedly due when the company reported first-quarter profits. More Wall Street Analysts: Analyst unveils startling Nvidia stock forecast amid tariffs Wall Street sounds alarm on Tesla, Elon Musk problem Analysts see challenges for Apple over tariffs There was surprisingly decent news on the economy. Purchasing managers reports from Standard & Poor's were showed the economy was still expanding in March. Meanwhile, a report on new-home sales in March were stronger than expected. The report said home sales rose to a seasonally adjusted annual rate of 724,000 units. Sales were strongest by far in the South, which had been hit hard by bad weather in January and February. But the cheer was offset by comments from Ryan Marshall, CEO of PulteGroup () , one of the nation's biggest home builders. Starting in April, he said during the company's earnings call Tuesday, "We have seen consumers at all price points impacted by changing macro conditions and any resulting decline in overall consumer confidence."Sign in to access your portfolio
Miami Herald
23-04-2025
- Business
- Miami Herald
Stock Market Today: Stocks up on hope for China trade deal, Trump's Fed remark
1:55 p.m. Stocks were holding onto sizable gains Wednesday as many investors cheered the possibility trade talks between the United States might at least start. At the same time, President Trump's announcement he wouldn't try to remove Federal Reserve Chairman Jerome Powell cheered the market, too. The market's gains came despite a report from the Federal Reserve that uncertainty about international trade was pervasive across the country. At 3 p.m. ET, the Standard & Poor's 500 index was up 1.7% at 5,379. The Dow Jones industrial Average was up 458 points, or 1.8%, to 39,648. The tech heavy Nasdaq Composite Index was up 2.8% to 16,776. The index was led by such stalwarts as Tesla (TSLA) , (AMZN) and Nvidia (NVDA) . The Fed's Beige Book report, compiled by the Fed's 12 regional banks, noted deep uncertainty about tariffs and the state of the economy. The Cleveland Fed noted consumers were buying new vehicles now to get ahead of tariffs. The China talk started Tuesday when Treasury Secretary Scott Bessent said the tariff situation with China was sustainable. The U.S. is imposing tariffs of up 145% on some Chinese imports. Then, the president said he might consider knocking the tariffs down to something around 50%. There were thoughts he might make the cut unilaterally. The likely answer from China to the idea is likely to be skepticism. And, again, China was not offering Wednesday to start talks yet. CEOs from three giant companies appear to have played a role in getting the President to tone down his tariff talk. The trio, from Walmart (WMT) , Target (TGT) , and Home Depot (HD) , "did not mince words" about what might occur if the tariff issues doesn't get resolved, according to an Axios report. The executives met with Trump Monday afternoon and told him warned him that his tariff and trade policy could disrupt supply chains, raise prices and empty shelves, according to sources familiar with the meeting. While retail prices aren't rising now, the trio said price increases will start to hit in perhaps two weeks. Gold hit $3,509 an ounce in early Tuesday trading and then fell back. The metal was falling again Wednesday, to $3,313 an ounce in New York, down $105. The runup to $3,500 had all the characteristics of a bubble waiting to burst, and it did. Gold stocks were lower. Newmont NEM, one of the biggest U.S.-domiciled producers was down 2.3% to $53.27. Crude oil, meanwhile, was down $1.57 a barrel to $62.12 a barrel in New York. Brent crude, traded in London, was down $2.50 to $64.94. AAA's national gas price was $3.171 a gallon on Wednesday, up from $3.166 on Tuesday. Stocks soared at the open Wednesday for a second day in a row as investors cheered President Donald Trump's comments that he hoped a trade deal with China could negotiated soon. The rally retreated from frenzied levels when it became apparent a deal wasn't remotely close and might take weeks or months - once the United States and China actually started to negotiate. Don't miss the move: SIGN UP for TheStreet's FREE Daily newsletter The question is who wants a deal more. A Chinese official in Beijing said, "The door to talks is wide open." At the same time, President Trump said he wouldn't be firing Federal Reserve Chairman Jerome Powell (which might not be legally possible). That also cheered investors. At 1:45 p.m. ET, the Dow was up about 39,667, up 480 points but down from a gain of nearly 1,200 points reached soon after the open. The Standard & Poor's 500 Index was up 2% to 5,392. The Nasdaq Composite Index was up 3% to 16,792. Related: Analysts reboot AMD stock price targets ahead of earnings Tesla (TSLA) shares were higher after CEO Elon Musk said he would be reducing his time with the Trump Administration in the next month or so and and concentrate more efforts on the company. Shares of both companies were higher. Boeing was up 5.7% to $171.70. Tesla jumped 6.8% to $254.20. Related: Former big tech CEO has shocking take on Nvidia Tesla's net income slid 71% in the first quarter, as the company struggled to overcome competitive pressures, especially overseas and a reputational hit from Musk's polarizing role in the Trump administration. On a more somber note, Bloomberg News reported that Intel (INTC) would be announcing job cuts of as much as 20% as the legendary chip maker tries to stabilize its business. The announcement was reportedly due when the company reported first-quarter profits. More Wall Street Analysts: Analyst unveils startling Nvidia stock forecast amid tariffsWall Street sounds alarm on Tesla, Elon Musk problemAnalysts see challenges for Apple over tariffs There was surprisingly decent news on the economy. Purchasing managers reports from Standard & Poor's were showed the economy was still expanding in March. Meanwhile, a report on new-home sales in March were stronger than expected. The report said home sales rose to a seasonally adjusted annual rate of 724,000 units. Sales were strongest by far in the South, which had been hit hard by bad weather in January and February. But the cheer was offset by comments from Ryan Marshall, CEO of PulteGroup (PHM) , one of the nation's biggest home builders. Starting in April, he said during the company's earnings call Tuesday, "We have seen consumers at all price points impacted by changing macro conditions and any resulting decline in overall consumer confidence." Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Straits Times
22-04-2025
- Business
- Straits Times
US stocks soar on White House optimism on China trade deal, Dow up 2.7%
Traders working on the floor of the New York Stock Exchange, in New York City, on April 22. PHOTO: REUTERS US stocks soar on White House optimism on China trade deal, Dow up 2.7% NEW YORK - Wall Street stocks jumped on April 22, rebounding from the prior day's rout, after upbeat comments from Trump administration officials about US-China trade talks. US Treasury Secretary Scott Bessent told a closed-door event in Washington that the tit-for-tat tariff war would de-escalate soon. Later, White House spokeswoman Karoline Leavitt told reporters, 'the president and the administration are setting the stage for a deal... the ball is moving in the right direction.' Major indices spent the entire day in positive territory, with the Dow Jones industrial Average finishing at 39,187.04, up 2.7 per cent The broad-based S&P 500 gained 2.5 per cent to 5,287.76, while the tech-rich Nasdaq Composite Index jumped 2.7 per cent to 16,300.42. The April 22 rally is 'another example of how the risk is to the upside,' said CFRA Research's Sam Stovall, who characterised the market as oversold due to bearish sentiment. But the International Monetary Fund slashed its forecast for global growth this year, citing the effect of US President Donald Trump's new tariff policies. Major indices fell about 2.5 per cent on April 21 after Mr Trump renewed his attacks on Federal Reserve chairman Jerome Powell, moves that prompted another rise in US Treasury bond yields. However, bond yields retreated on April 22. Mr Stovall said the market is very uncomfortable with Mr Trump's pressure on Mr Powell. The threat of Mr Trump firing Mr Powell 'is enough to push the market down 3 per cent,' Mr Stovall said. 'If he actually did it, I think it would push the market down even further.' Gains were broad-based on April 22, which included a heavy day of earnings news. On the positive side, GE Aerospace jumped 6.1 per cent as it reported higher profits and said it had enacted a number of cost-control measures to counter tariff effects. But RTX dove 9.8 per cent as the defence giant disclosed an estimated hit of US$850 million (S$1.1 billion) due to tariffs. AFP Join ST's Telegram channel and get the latest breaking news delivered to you.
