Latest news with #StephenHemsley
Yahoo
5 days ago
- Business
- Yahoo
Patient Capital Opportunity Equity Strategy Initiated a Position in UnitedHealth Group Incorporated (UNH) on a Dip
Patient Capital Management, a value investing firm, released its 'Patient Capital Opportunity Equity Strategy' second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The strategy generated a total return of 15.3% net of fees in the quarter compared to the strategy's unmanaged benchmark, the S&P 500 Index's 10.9% return. According to a three-factor performance attribution model, the selection effect contributed positively to the portfolio's performance, which was partially offset by allocation and interaction effects. In addition, you can check the fund's top 5 holdings to know its best picks in 2025. In its second quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as UnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company that operates through UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx segments. The one-month return of UnitedHealth Group Incorporated (NYSE:UNH) was -4.62%, and its shares lost 49.04% of their value over the last 52 weeks. On July 17, 2025, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $288.07 per share, with a market capitalization of $261.32 billion. Patient Capital Opportunity Equity Strategy stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2025 investor letter: "This quarter we entered five new positions, while exiting three. We initiated a position in UnitedHealth Group Incorporated (NYSE:UNH), one of the largest healthcare companies in the United States, after the stock declined more than 50% from its 2025 highs, reaching multi-year lows. The drop followed a rare misstep in its Medicare Advantage business, where higher-than-expected costs drove margin compression, a cut to EPS and ultimately, the withdrawal of forward guidance. In response, the company announced a leadership change, bringing back former CEO and current Chairman Stephen Hemsley. UNH has long been a market favorite for its consistency in growth, earnings and return on capital. The disappointment led investors to flee. While the short-term outlook remains murky, over the long-term we have confidence the company can improve underwriting margins. With all competitors focused on underwriting to margins, future pricing should be more rational and in line with current usage trends. Rebuilding investor confidence may take time, but we believe UNH's integrated platform and unique asset mix position it to remain a category leader and return to strong returns over time. Following the sell-off, several insiders stepped in to buy stock, most notably Stephen Hemsley with a $25M purchase and the CFO, John Rex, with $5M. The company also has an $8.4B buyback authorization (roughly 3% of shares) and a robust 10% free cash flow yield. Management remains confident in its ability to compound EPS at a 13 16% rate over the long term. We view the recent dislocation as an opportunity to own a high-quality compounder at a compelling valuation." A senior healthcare professional giving advice to a patient in a clinic. UnitedHealth Group Incorporated (NYSE:UNH) is in 18th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 139 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the first quarter, which was 150 in the previous quarter. While we acknowledge the potential of UNH as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered UnitedHealth Group Incorporated (NYSE:UNH) and shared Vulcan Value Partners' views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey. 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
Business Insider
16-07-2025
- Business
- Business Insider
UnitedHealth Stock (UNH) Down as $3.3B Secret Sales Raise Eyebrows
UnitedHealth Group (UNH) is facing questions about how it maintained its streak of over 60 consecutive quarterly earnings beats. According to a Bloomberg report, the healthcare giant quietly sold stakes in some business units to firms like Warburg Pincus and KKR (KKR), generating $3.3 billion in profit that helped it beat Q424 estimates. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. UNH stock was down over 2% during Tuesday's regular trading session as investors reacted to the company's accounting move and looked ahead to its Q225 earnings report on July 29. The Deals That Boosted Profits At the end of 2024, UnitedHealth was facing rising medical costs and regulatory pressures that were hurting profits. The company then offset this by making the last-minute asset sales to private equity firms. Without the asset sales, UNH would have missed earnings for the first time in over 15 years. Thus, UNH added the gains to its adjusted earnings, which helped it report adjusted EPS of $6.81 in Q4 and beat the forecast by $0.07. UNH's Unusual Accounting Practices It must be noted that UNH left out a $7.1 billion loss from its Brazil exit, calling it a one-time event, but included the $3.3 billion gain from U.S. asset sales in its core earnings. Analysts say that's allowed under U.S. rules, though some called it 'unusual' and said the earnings were low-quality and non-recurring. This new finding adds to the growing list of challenges UnitedHealth is already facing. The company is under criminal investigation by the DOJ for alleged Medicare billing irregularities. In May, CEO Andrew Witty abruptly resigned, replaced by former CEO Stephen Hemsley, to lead the company as it deals with growing regulatory pressure. Is UNH a Good Buy Right Now? Turning to Wall Street, UNH stock has a Moderate Buy consensus rating based on 18 Buys, seven Holds, and one Sell assigned in the last three months. At $357.14, the average UnitedHealth stock price target implies a 21.54% upside potential.
Miami Herald
15-07-2025
- Business
- Miami Herald
UnitedHealth's shocking move to please Wall Street
UnitedHealth (UNH) has stumbled through what has been a testing year. Sliding sales, a gloomy cost forecast, and a surprise profit cut rattled its investors early on. Don't miss the move: Subscribe to TheStreet's free daily newsletter Legal scrutiny added to the fire, along with a CEO scrambling to restore confidence. However, just as we thought we had seen the stock's worst, it has reportedly pulled off a quiet financial move that could prove to be the most shocking of them all. Image source: Alcorn/Bloomberg via Getty Images UnitedHealth kicked off the year with a stark warning. In early January, management told investors to brace for rising medical costs, forecasting a medical care ratio north of 86%, compared to the 85% Wall Street had priced in. Then came the major gut punch in April. UnitedHealth cut its full-year profit forecast from roughly $30 per share to a range of $26 to $26.50. The medical insurance giant blamed unexpected service and care costs, in what was the sharpest guidance cut it had posted since early pandemic turbulence. Related: One Washington move could shake Big Pharma to its core The timing and size of the drop posed serious questions over the sustainability of UnitedHealth's numbers and whether cost pressures were bleeding from the books. Things only got worse. In May, news broke that the Justice Department launched a criminal investigation into Medicare Advantage billing practices. UnitedHealth, which has been no stranger to regulatory scrutiny, was suddenly in the DOJ's crosshairs for potential fraud related to its coding systems. By June, the newly reinstalled CEO, Stephen Hemsley, was doing a lot of the cleanup. He addressed shareholders directly, vowing to "earn back your trust." Consequently, as of mid-July, UnitedHealth stock has tanked over 40% year-to-date. Over the past six months alone, the stock has nosedived 46%. Mr. Market almost missed UnitedHealth's quiet financial moves. According to Bloomberg, in protecting its impressive 60-quarter earnings beat streak, the company resorted to an accounting twist that's now raising eyebrows. UnitedHealth quietly sold stakes in multiple of its business units, generating $3.3 billion in profit, mostly in the back end of last year. These weren't traditional divestitures. The deals, struck with firms like Warburg Pincus and KKR, reportedly included buyback clauses. UnitedHealth therefore has the right (or obligation) to repurchase the same assets at higher prices down the line. Related: JPMorgan reveals 9 stocks with major problems That kind of structure isn't new to private equity circles, but the timing, terms, and secrecy are what's turning heads. People familiar with the transactions say UnitedHealth looked to push those deals to close by December 31, explicitly asking for them not to be publicized. That's prompted speculation over sales engineering, in part, to ensure the businesses didn't break their decades-long earnings streak. In January, UnitedHealth barely beat Q4 expectations. The company topped forecasts by seven cents, even as its medical care ratio rose, signaling higher health care expenses. On its Q4 call and in its annual report, UnitedHealth talked about improving operating costs while noting a $3.3 billion gain. However, it didn't say what was sold or how the profits were booked. More Stock News: Elon Musk's xAI is already shockingly massiveBank of America drops shocking call on Super Micro stockCathie Wood drops bold message on Apple, Tesla stock That detail flew under Wall Street's radar at the time. However, the latest scoop suggests that UnitedHealth may have posted its first earnings miss in more than 15 years, if it wasn't for the last-minute financial engineering. To be fair, UnitedHealth isn't new to profit‑padding allegations. As mentioned earlier, it's already in hot water with the Justice Department's fraud unit for allegedly inflating Medicare Advantage reimbursements through aggressive diagnosis coding, Going further back, it weathered an SEC probe in 2006 over backdated stock options, which eventually led to a massive $350 million settlement and the resignation of then‑CEO William McGuire. Related: Google Brain founder has an unexpected one-word message on AI The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
15-07-2025
- Business
- Yahoo
UnitedHealth's Commercial Unit: A Stabilizer Amid Healthcare Turmoil?
UnitedHealth Group Inc. UNH is currently navigating a challenging healthcare landscape, with its Medicare Advantage business reportedly facing regulatory scrutiny and rising care costs. However, amid all the hurdles, its commercial insurance business is stepping up as a vital source of stability. As of March 31, 2025, the UnitedHealthcare business served 50.1 million people, representing a 1.9% year-over-year growth, driven by its self-funded commercial benefits. With more than 30 million members, the company's commercial segment benefited from favorable pricing and a healthier risk pool compared to government plans. It showed consistent growth over time. Commercial plans are available to both individuals and employers, have less volatile cost structures and are less vulnerable to sudden changes in regulations than Medicare Advantage. After the return of former CEO Stephen Hemsley in May 2025, the company is shifting its focus. As it works on tightening controls and compliance in its Medicare operations, UNH is also putting a strong emphasis on growing its commercial portfolio. Even though UNH has pulled back on its full-year guidance due to ongoing pressures, the commercial division continues to provide a buffer against uncertainty. With the broader economy facing challenges that affect both consumers and providers, the company's approach, particularly the strong performance of its commercial business, continues to anchor its financial stability. Some of UNH's major competitors in the healthcare plan provider space are Molina Healthcare, Inc. MOH and The Cigna Group CI. Molina Healthcare recently warned about rising medical costs and erratic utilization trends, which led it to cut its 2025 earnings guidance. In contrast to its previous prediction of at least $24.50, Molina now projects adjusted earnings per share for the entire year to be between $21.50 and $22.50. Molina now projects adjusted earnings of about $5.50 per share for the second quarter of 2025. By strategically selling its Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D, and CareAllies businesses to HCSC in March 2025, Cigna has differentiated itself. Its commercial-heavy model will provide clearer short-term visibility and more consistent underwriting performance. Cigna reported impressive results in the first quarter of 2025, driven by premium rate increases and strengthened relationships with existing clients. Shares of UNH have plunged 39.9% in the year-to-date period compared with the industry's decline of 32.3%. Image Source: Zacks Investment Research From a valuation standpoint, UnitedHealth trades at a forward price-to-earnings ratio of 12.85, above the industry average of 11.5. UNH carries a Value Score of B. Image Source: Zacks Investment Research The Zacks Consensus Estimate for UnitedHealth's 2025 earnings is pegged at $21.85 per share, implying a 21% dip from the year-ago period. Image Source: Zacks Investment Research The stock currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report Molina Healthcare, Inc (MOH) : Free Stock Analysis Report Cigna Group (CI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Business Insider
10-07-2025
- Business
- Business Insider
UnitedHealth Stock (UNH) Sinks as DOJ Criminal Probe into Medicare Fraud Deepens
UnitedHealth (UNH) stock was lower today on reports that it was being investigated by the U.S. Justice Department over its Medicare billing practices. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Employees Questioned As reported by the Wall Street Journal, the department's criminal healthcare-fraud unit is probing how UnitedHealth deployed doctors and nurses to gather diagnoses that bolstered its payments. The paper first reported back in May that an investigation by the department into the Medicare business had already begun, but these new details were a further blow to UnitedHealth. Former UnitedHealth employees have reportedly been questioned by prosecutors working for the healthcare-fraud unit. The Federal Bureau of Investigation and the Department of Health and Human Services' Office of Inspector General also participated in some of the interviews. It is alleged that UnitedHealth's efforts to encourage the documentation of certain lucrative diagnoses included testing patients, implementing procedures to ensure that medical conditions were captured, and sending nurses to patients' homes. Practices Review UnitedHealth CEO Stephen Hemsley has said the company will review its practices for documenting payment-triggering diagnoses. In Medicare Advantage, the program through which private insurers administer the benefits of the federal program for seniors and the disabled, the companies are paid more if their enrollees have certain health conditions. A UnitedHealth spokesman said that the company welcomes 'regular reviews of our policies and practices.' This is another blow to the UnitedHealth stock, which is down 39% over the last 6 months. This has included the murder of chief executive Brian Thompson in New York last December, and his replacement Andrew Witty departing for personal reasons. Is UNH a Good Stock to Buy Now? On TipRanks, UNH has a Moderate Buy consensus based on 18 Buy, 7 Hold and 1 Sell ratings. Its highest price target is $440. UNH stock's consensus price target is $361.91 implying a 19.16% upside.
