Shares of UnitedHealth Group are on the rise before the market opens on Friday, following news that Warren Buffett’s Berkshire Hathaway has purchased a significant number of shares in the company. According to a regulatory filing, Berkshire acquired about 5 million shares last quarter, valued at approximately $1.57 billion.
Buffett, a legendary investor, plans to step down as CEO of Berkshire Hathaway at the end of this year, marking the conclusion of a remarkable six-decade career. Investors closely monitor Berkshire’s activities to gain insights into Buffett’s investment strategies.
The filing did not specify who at Berkshire made this investment decision. Besides Buffett, investment managers Ted Weschler and Todd Combs also manage portions of Berkshire’s portfolio. Combs also serves as the CEO of Geico.
In addition to stocks, Berkshire owns various businesses across multiple industries, including Geico insurance, BNSF railroad, major utilities, and a variety of manufacturing and retail companies. Its diverse portfolio includes well-known brands like See’s Candy and Dairy Queen.
However, UnitedHealth has faced several challenges recently. The company is currently cooperating with federal investigations related to its Medicare operations. Last month, it reported that it contacted the Department of Justice after learning about inquiries into aspects of its business.
Earlier this year, it was disclosed that federal officials were looking into how UnitedHealth records diagnoses to secure extra payments for its Medicare Advantage plans, which serve mainly individuals aged 65 and older. With over 8 million members, UnitedHealth is the largest provider of these privately managed Medicare plans.
The company has been under pressure in recent quarters due to increased healthcare usage and recent rate cuts. Reports suggest that the investigation includes a focus on billing practices and how UnitedHealth has utilized medical professionals to optimize diagnoses for payment purposes.
UnitedHealth Group operates one of the nation’s leading health insurance and pharmacy benefits management services, as well as a growing segment called Optum, which offers healthcare and technology solutions.
Despite these troubles, shares of UnitedHealth surged by more than 12% in premarket trading on Friday. However, the stock has experienced a tough year, losing roughly half of its value since last December.
