For years, UnitedHealth Group seemed to glide through the storms of the healthcare market. Its dividend, a modest whisper in 2010, had swelled to a roar by 2025, while shares climbed with the confidence of a man sure of his destination. Yet, like the ticking of a clock, the ascent paused-shares now lie 40% lower year to date, battered by scandals and the sudden, tragic end of Brian Thompson, a man whose name once carried the weight of a corporate empire.
Still, on August 14, the market stirred. A filing revealed Berkshire Hathaway had acquired 5 million shares. Investors, ever the mimics of titans, followed. But to trade on the shadow of a legend is to dance with ghosts-profitable only if the music still plays.
Big growth potential for all segments
UnitedHealth’s four segments stretch like fingers reaching into the vast, aching body of American healthcare. UnitedHealthcare, its largest limb, now treads water. Margins have crumpled from 6.2% to 2.4% in a single quarter, while Optum’s three divisions saw their margins shrink from 6.1% to 4.6%. Revenue, though, climbed-a hollow victory when earnings tumbled from $9.1 billion to $5.2 billion.
The culprit? Medical costs, rising like a tide no dam can hold. New CEO Stephen Hensley admitted as much: “We underestimated the accelerating medical trend.” Six billion dollars-gone, like smoke from a careless hand.
Yet the company is not idle. Audits, AI, and a cold resolve to cut waste-initiatives promising $1 billion in savings-suggest a mind sharpened by necessity. Premiums will rise, and with them, perhaps, the hope that Medicare Advantage plans will no longer be priced like charity.
Optum Rx, with its 190 million prescriptions delivered to American homes, and Optum Insight, chasing an 18%-22% operating margin, remain glimmers in the fog. For now, the future is a ledger of possibilities.
It’s not just Berkshire buying
Berkshire’s move is the headline, but others have joined the chorus. David Tepper, Michael Burry, BlackRock, Goldman Sachs-all have added their voices to the symphony of confidence. Even insiders, with their $25 million in purchases, have bet on a rebound. Yet, as Peter Lynch once warned, insiders sell for many reasons, but buy for only one: they think the price will rise. A truth as simple as it is rarely heeded.
Why UnitedHealth is a buy for retail investors, too
Warren Buffett, that old fox, once wrote that cash flow is the pulse of a business. UnitedHealth’s trailing-12-month operating cash flow now stands at $29 billion-a number that hums with the quiet certainty of a man who knows where his money sleeps.
Its price-to-earnings ratio, a lean 13.7, sits comfortably in the shade of the S&P 500’s bloated 26. Revenue growth of 13% and a dividend yield of 2.8%-triple the market’s average-paint a picture of a company that, for all its stumbles, still holds a lantern in the dark.
For the patient investor, the question is not whether UnitedHealth will rise, but whether the market’s mood will shift to notice it. The stock, like a man in a quiet room, waits. And waits. And perhaps, one day, the world will knock on the door.
Until then, the trader watches, notebook open, pen poised. The market, after all, is a story we tell ourselves-one where endings are written only in hindsight. 😊
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2025-09-08 17:42