I recently came across some intriguing news about UnitedHealth that caught my attention as an investor. After a significant drop in the stock price last week, the new CEO, Stephen Hemsley, made a bold move by purchasing $25 million worth of UNH stock on Friday, May 16, 2025. According to the Form 4 filing with the Securities and Exchange Commission, he acquired 66,700 shares at an average price of $288.57. This substantial investment by the CEO signals a strong vote of confidence in the company's future, especially after what the market has described as a "bloodbath" for the health insurer. I find this development particularly noteworthy as I evaluate my own investment decisions.
The question of whether now is a good time to buy UNH weighs heavily on my mind. On one hand, the CEO's purchase suggests that he believes the stock is undervalued at its current price, which could indicate a potential rebound. I am encouraged by this insider buying, as it often reflects a belief in the company's long-term growth prospects. However, I am also cautious because the recent drop in UNH's stock price might reflect broader challenges in the health insurance sector or lingering market volatility. After some reflection, I am leaning toward buying a small position in UNH, as I think the current price might offer a good entry point, but I plan to monitor the stock closely for any further developments.
Another question I am grappling with is whether I would buy or sell UNH at $300. Given that the stock was purchased at $288.57, a rise to $300 would represent a modest gain. If UNH reaches $300, I think I would hold onto my shares rather than sell, as I believe there could be more upside potential, especially if the stock is indeed on a path to recovery. However, I would also set a stop-loss order just below $288 to protect myself from any unexpected downturns. My strategy here is to balance the potential for gains with the need to manage risk, especially in a stock that has experienced recent volatility.
I am also pondering whether UNH is on its way back to $400, a price level it has seen in the past. While the CEO's purchase is a positive signal, I am not entirely convinced that UNH will reach $400 in the near term. The stock would need to rise significantly from its current level, and that kind of recovery would likely depend on broader market conditions, the company's upcoming earnings reports, and any shifts in the healthcare sector. For now, I think a more realistic target might be around $350, and I would reassess my position if the stock approaches that level. I am cautiously optimistic but want to temper my expectations with a dose of realism.
In conclusion, I am navigating this opportunity with UNH carefully, balancing the encouraging insider buying with the uncertainties in the market. I plan to start with a small investment in UNH, keeping a close eye on its performance over the next few weeks. My strategy at $300 will be to hold, and while I am hopeful for a recovery, I am not banking on a quick return to $400. By staying informed and flexible, I aim to make the most of this situation while managing the risks. The coming days will be crucial, and I am ready to adapt my approach as new information emerges.
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