"Peter Mallouk, the president and CEO of Creative Planning, called Berkshire's purchase the "perfect Buffett play" because he "loves a company that is 'unfairly' valued to the low end." Mallouk, who's been studying Buffett for more than 30 years, said the bargain hunter "clearly" sees UnitedHealth as "a major player, not going anywhere, but going through a very rough patch, part of which is reputational but survivable.""
"The UnitedHealth bet is "interesting," Darren Pollock, a portfolio manager at Cheviot Value Management, told Business Insider. He said the health insurer is under " intense regulatory scrutiny," but operating in a "business-friendly political environment and is "so well-entrenched that it's hard to see the company being materially displaced." CEO Stephen Hemsley said when second-quarter earnings were released last month that it had "embarked on a rigorous path back to being a high-performing company.""
Berkshire Hathaway increased cash reserves and reshaped its portfolio last quarter, adding a $1.6 billion stake in UnitedHealth and trimming Apple holdings. UnitedHealth shares had fallen nearly half over the prior 12 months amid earnings worries, federal probes, public backlash, and leadership turmoil after the fatal shooting of CEO Brian Thompson; the stock jumped 12% on disclosure of Berkshire's investment. Longtime observers praised the UnitedHealth purchase as a value-driven move, citing the insurer's entrenched market position despite regulatory scrutiny. One analyst expressed surprise that Berkshire did not execute share buybacks during the quarter.
Read at Business Insider
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