Many investors may have been surprised by the news that Warren Buffett’s Berkshire Hathaway’s (NYSE:BRKa) (NYSE:BRKb) mysterious stock is none other than the healthcare conglomerate Unitedhealth Group (NYSE:UNH).
Amid an overall slowdown in the healthcare industry and public backlash against some of the company’s policies, followed by the tragic assassination of Brian Thompson, the company’s former CEO, most investors were looking at the beaten-down name as a done deal for the markets.
Not by accident, the stock has shed a brutal 45% since the beginning of the year.
But where the market saw wreckage, astute contrarian investors saw an opportunity. Such is the case of Warren Buffett and... you may have guessed it... our state-of-the-art AI-powered stock picker.
Here’s the rationale behind the AI’s choice for adding UNH stock to the list of picks:
Undervalued healthcare giant poised for recovery
- UnitedHealth Group represents a compelling buying opportunity following the recent price correction, with shares trading at just 60% of 52-week highs, despite solid fundamentals.
- Our ML engine highlights three key strengths in UNH’s profile: market performance potential, consistent growth metrics and attractive valuation multiples.
- The company maintains impressive growth with $410 billion in revenue (8% y/y increase) and strong expansion in the Medicare Advantage segment (projected member growth of 10% in 2025).
- At current levels, UNH offers exceptional value with a P/E ratio of 15.7 and a PEG ratio of 0.35, well below fair value estimates of $500-$530.
- Recent positive industry catalysts include a 5% Medicare Advantage payment increase for 2026, which supports the company’s long-term earnings growth target of 13-16%.
