To The Moon

I was excited to see the recent news about Berkshire Hathaway $Berkshire Hathaway(BRK.A)$  , led by Warren Buffett, releasing its 13F filing for the second quarter of 2025 today. The highlight for me was that Berkshire initiated a new position in U.S. health insurance giant UnitedHealth$UnitedHealth(UNH)$  , purchasing 5.039 million shares for about $1.6 billion. The average purchase price was $314 per share, and by the end of the quarter, the position was valued at $1.57 billion, making it the 18th largest holding in Berkshire's portfolio—just behind Amazon and $Constellation(STZ)$  . This move by Buffett, a legendary value investor, caught my attention as a potential signal of undervaluation.

The timing of this investment intrigued me, especially given UnitedHealth's challenges this year. The stock has faced significant headwinds, including a 46% drop in 2025 due to rising medical costs, federal investigations into Medicare billing practices, and leadership changes following the abrupt departure of CEO Andrew Witty in May. Despite these issues, Buffett's decision to buy in suggests he sees long-term value, possibly betting on a recovery as the company addresses its operational missteps under new leadership. This perspective aligns with his history of swooping in on quality companies during periods of distress.

I also noticed that UnitedHealth's current price-earnings ratio is near its lowest in over a decade, trading at around 12 to 16 times forward earnings, depending on the estimate. This valuation seems attractive compared to historical averages and peers like Humana or CVS Health, which trade at higher multiples. The company's stable revenue—$111.6 billion in Q2, up 13% year-over-year—and its 3.25% dividend yield further bolster the case for a potential turnaround. Buffett's focus on dividends and cash flow reliability likely played a role in his decision, making this a compelling narrative for me as an investor.

The market's reaction was swift, with UnitedHealth shares jumping 12% on the news, marking its best day since 2020. This“Buffett Bounce”reflects the confidence other investors place in his picks, and it helped lift the Dow Jones Industrial Average to a new high. I found it interesting that other prominent investors, like Michael Burry and David Tepper, also bought into UnitedHealth last quarter, suggesting a broader belief that the stock's decline may be overdone. This collective interest reinforces my view that the current price could be a buying opportunity.

Encouraged by this development, I decided to open a small position in UNH following the news. I see it as a chance to get in at a potentially undervalued level, especially with Buffett's endorsement and the company's dominant position as the largest private health insurer in the U.S. The recent acquisition of Amedisys and the potential for Medicare Advantage pricing adjustments in 2026 also hint at future growth, which I'm hopeful could offset the current challenges. It's a calculated move for me, balancing the risks with the long-term potential.

However, I'm not ignoring the risks. The ongoing Justice Department investigation, the fallout from a major cyberattack last year, and the uncertainty around medical cost trends could continue to pressure the stock. Buffett's past criticism of the U.S. healthcare system as a“tapeworm”on the economy also raises questions about his confidence in the sector long-term. Still, his return to UnitedHealth after selling out in 2010 suggests he believes the current issues are temporary, and I'm inclined to trust his track record over short-term noise.

Looking ahead, I'll be watching key price levels around $325 and $380 for potential resistance, as well as support near $250, to gauge the stock's momentum. Analysts seem cautiously optimistic, with many maintaining“Buy”ratings and price targets suggesting 15% upside from current levels. I plan to monitor UnitedHealth's next earnings report and any updates on the federal investigation to refine my position. For now, I'm comfortable with my small stake, viewing it as a play on Buffett's value philosophy and the company's underlying strengths.

Overall, this news has sparked my interest in UNH, and I'm glad I acted on it with a modest investment. The combination of Buffett's strategic move, the stock's beaten-down valuation, and the potential for a sector recovery makes it an exciting opportunity to watch. I'll keep an eye on how the story unfolds, ready to adjust my approach based on new developments, but I'm optimistic about the long-term prospects given the company's market leadership and the support from savvy investors like Buffett.

As a retail investor, I focus mainly on the US and Singapore markets, combining a mix of technical trading and long-term investing strategies. I enjoy analyzing charts, spotting patterns, and making calculated moves based on both market sentiment and fundamentals. While I'm not a professional, I treat my portfolio seriously and continue to learn and grow with each trade. If you're also navigating the markets and enjoy discussing stocks, options, or market trends, feel free to follow me. Let's learn and grow together as a community.

@TigerStars  @Tiger_comments