Billionaire investor David Tepper increased his stake in the struggling health insurance giant, UnitedHealth (UNH), during Q2. His move mirrors Warren Buffett’s Berkshire Hathaway (BRK.B), which also revealed a new $1.57 billion stake in UNH stock. Further, Michael Burry’s Scion Asset Management bought calls on 350,000 shares.
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UNH stock gained 14% on Friday as bullish bets from Top hedge funds boosted investor hopes for a rebound.
According to a recent 13F filing, Tepper’s Appaloosa Management LP added 2.3 million shares of UNH, bringing the total value of the stake to $764 million. This makes UNH the fund’s second-largest holding after Chinese e-commerce giant Alibaba (BABA).
Tepper’s bet comes at a turbulent time for UnitedHealth, which is dealing with a criminal probe into Medicare billing, a CEO shakeup, and the aftermath of a massive cyberattack. UNH stock has plunged about 40% year-to-date.
Tepper Shifts Strategy on China
Tepper’s bet on UNH aligns with his investment strategy, which involves making bold bets on companies that others are avoiding. It is similar to his earlier investment in Chinese stocks, which he began buying last year when many investors were pulling back over economic and geopolitical concerns.
It must be noted that those investments paid off as China’s MSCI benchmark surged 46% over the past year due to Beijing’s economic stimulus efforts.
However, Tepper is now taking a more cautious approach. The fund reduced its holdings in major Chinese companies amid rising trade tensions. Appaloosa cut its stake in Alibaba by over 20% and also trimmed its positions in JD.com (JD), Baidu (BIDU), and PDD Holdings (PDD).
Tepper’s Other Bullish Bets
Apart from UNH, the investor also ramped up his stake in Nvidia (NVDA), adding 1.45 million shares for a total of 1.75 million. This 483% increase brings the position’s value to over $276 million.
Also, he made some notable new investments last quarter. These include tech giant Intel (INTC), with 8 million shares valued at $179.2 million, and aerospace and defense company RTX (RTX), with 585,000 shares worth $85.4 million.
The third-largest new buy is health information technology and clinical research provider IQVIA Holdings (IQV), with 300,000 shares valued at $47.3 million.
Is UNH a Good Buy Right Now?
Turning to Wall Street, UNH stock has a Moderate Buy consensus rating based on 18 Buys, four Holds, and two Sells assigned in the last three months. At $312.65, the average UnitedHealth stock price target implies a 2.17% upside potential.
