Warren Buffett, David Tepper, and Michael Burry's UnitedHealth Group Stock Buys: Should You Follow Suit?

Billionaires Warren Buffett and David Tepper, along with "Big Short" investor Michael Burry, have recently purchased UnitedHealth Group stock. Buffett initiated a new position in Q2 2025, Berkshire Hathaway's stake in UnitedHealth tops $1.5 billion. Tepper increased Appaloosa's stake by 1,300% in Q2, and Burry's Scion Asset Management bought 20,000 shares. UnitedHealth Group's shares are down 50% from their peak, with a P/E ratio of 13, its lowest in over a decade. The company's unexpected drop in earnings and DOJ investigations into its Medicare billing practices are concerns for investors.

Billionaires Warren Buffett and David Tepper, along with "Big Short" investor Michael Burry, have recently increased their stakes in UnitedHealth Group (NYSE: UNH). This move has sparked interest among investors, as the stock has been down 50% from its peak, with a price-to-earnings (P/E) ratio of 13, its lowest in over a decade.

In the second quarter of 2025, Buffett initiated a new position for Berkshire Hathaway, with the company's stake in UnitedHealth topping $1.5 billion. This marks a significant shift for Buffett, who has been a net seller of stocks for 11 consecutive quarters. Tepper, who runs Appaloosa hedge fund, increased his stake by 1,300% in Q2, making UnitedHealth Group the second-largest position in his portfolio. Meanwhile, Burry's Scion Asset Management bought 20,000 shares of the health insurer in recent months [1].

The attraction of UnitedHealth Group lies in its current attractive valuation. Despite the recent purchases by these prominent investors, shares of the health insurer remain more than 50% below their peak set in the fourth quarter of 2024. The company's P/E ratio of 13 reflects its lowest valuation in more than a decade [1].

However, the stock's recent decline can be attributed to an unexpected drop in earnings. UnitedHealth Group's medical costs have been much higher than anticipated in 2025, particularly with its Medicare Advantage plans. The company slashed its full-year guidance earlier this year and withdrew the guidance altogether one month later. Additionally, the U.S. Department of Justice is conducting criminal and civil investigations of UnitedHealth Group's Medicare billing practices [1].

Despite these challenges, Buffett, Tepper, and Burry have chosen to invest in UnitedHealth Group. They likely view the issues as temporary and believe the company will rebound strongly over time. The Motley Fool Stock Advisor analyst team, however, has not included UnitedHealth Group in their top 10 picks for investors to buy now [2].

Before making any investment decisions, investors should consider the risks associated with UnitedHealth Group's current situation. While the stock may be undervalued, the company faces significant challenges that could impact its performance in the near future.

References:
[1] https://finance.yahoo.com/news/billionaires-warren-buffett-david-tepper-084400246.html
[2] https://www.nasdaq.com/articles/billionaires-warren-buffett-and-david-tepper-and-big-short-investor-michael-burry-just