What Happened?
Shares of health insurance company UnitedHealth (NYSE: UNH) jumped 11.6% in the morning session after the company disclosed that Warren Buffett's Berkshire Hathaway had acquired a significant new stake, with news that regulators had also approved a major merger.
According to regulatory filings, Berkshire Hathaway accumulated a position of approximately 5 million shares valued at around $1.6 billion. The investment is seen as a major vote of confidence in the health insurer, whose stock had fallen significantly year-to-date amid various challenges. Adding to the positive news, regulators also cleared UnitedHealth's proposed $3.3 billion merger with Amedisys Inc., further bolstering investor optimism. Filings also revealed that other top investors, such as Michael Burry, had initiated new stakes in the company.
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What Is The Market Telling Us
UnitedHealth’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for UnitedHealth and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 3.3% on the news that its board of directors authorized the payment of a quarterly cash dividend, signaling a commitment to shareholder returns. The healthcare and insurance provider's board authorized a quarterly cash dividend of $2.21 per share. This represents an annualized yield of around 3.3%, which is notably high for the company. The positive investor reaction comes as UnitedHealth's stock has fallen significantly this year, making the dividend yield particularly attractive. The dividend will be paid on September 23, 2025, to shareholders of record as of September 15, 2025. This move is seen as an effort to boost shareholder returns amid a challenging environment of rising medical costs.
UnitedHealth is down 38.9% since the beginning of the year, and at $308.19 per share, it is trading 50.7% below its 52-week high of $625.25 from November 2024. Investors who bought $1,000 worth of UnitedHealth’s shares 5 years ago would now be looking at an investment worth $961.56.
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