UnitedHealth soars but Berkshire’s new stake may still be in the red

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UnitedHealth Group shares have soared almost 30% since Berkshire Hathaway’s disclosure in mid-August that it had purchased a bit more than 5 million shares between April 1 and June 30.

Minutes before that SEC filing, UNH closed at $271.49. On Friday, it ended trading at $352.51.

Although UNH had already started to bounce from its lowest close of the year of $237.77 on Aug. 1, Berkshire’s endorsement of the troubled stock is responsible for at least a sizable chunk of its recent gains.

It is not clear, however, whether Berkshire’s investment is profitable (on paper) at this point.

The current price is up just 13.0% since its $311.97 close at the end of Q2 on June 30.

We don’t know exactly when Berkshire did its buying during the second quarter, so we can only look at a range of possible purchase prices.

(And, of course, it may have continued to buy in the third quarter. We won’t know about that until mid-November.)

At Q2’s high of $606.36 per share, Berkshire would have paid $3.1 billion for its stake, putting it 42% into the red.

At the low of $248.88, the 5 million shares would have cost less than $1.3 billion, giving it a 42% gain.

Using the average close for the period, the price comes in at $1.9 billion. Today’s value of $1.8 billion is around 8% below that level.

Since Berkshire’s buying was presumably triggered by the price slide early in the quarter, the actual purchase price is probably at the lower end of the range, but there still appears to be a significant chance the stake is the red, despite the stock’s recent gains.

Berkshire & Co., however, are usually in it for the long haul, and there are some bullish signs for the stock, which is still down 30% year to date.

After meeting with UNH’s management, analysts at Morgan Stanley said, “We are incrementally positive following discussions with UNH [management] where it had conviction in the turnaround.”

On Friday, Morgan Stanley’s Erin Wright raised her price target to $395 from $325.

And on Tuesday’s “Lightning Round,” CNBC’s Jim Cramer said he doesn’t like to buy stocks that are under investigation, but “there are some people who seem to know that the worst is over.”

In an unusual move for the normally passive investor, Buffett told CNBC he’s “disappointed” the company went ahead with those plans, even though it knew he, representing KHC’s largest shareholder, opposed a split.

CNBC.com’s Yun Li quotes Gordon Haskett’s Don Bilson as saying, “Beyond any worries that investors might have with the plan itself, they must also grapple with the possibility that Buffett will now dump his stock.”

Because its stake is more than 10%, any sales would have to be reported publicly within two business days.

While the price of Berkshire A shares, the source of almost all his net worth, increased almost 10% over the past year, Buffett donated stock then worth $6.0 billion this summer to the Gates Foundation and several family foundations.

Last fall, his Thanksgiving gifts to the family foundations totaled $1.1 billion.

If Buffett had held onto all the shares he’s given away since 2006, he would now be worth approximately $350 billion.

That would put him in the #2 slot behind Elon Musk’s $428 billion on the annual list, which uses stock values as of Sept. 9.

The next day, Oracle shares soared on a strong earnings report, adding around $100 billion to Larry Ellison’s net worth. Tesla shares have also moved higher since then.

As a result, Buffett would be nearly tied with Ellison’s $352 billion in our hypothetical real-time ranking, with Musk still well ahead at $463 billion.

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Berkshire’s top holdings of disclosed publicly traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today’s closing prices.

Holdings are as of June 30, 2025 as reported in Berkshire Hathaway’s 13F filing on August 14, 2025, except for:

The full list of holdings and current market values is available from CNBC.com’s Berkshire Hathaway Portfolio Tracker.

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don’t forward questions or comments to Buffett himself.)

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Also, Buffett’s annual letters to shareholders are highly recommended reading. There are collected here on Berkshire’s website.

— Alex Crippen, Editor, Warren Buffett Watch