The mystery stock of Warren Buffett’s Berkshire Hathaway (BRK.B) has been revealed to be insurer UnitedHealth Group (UNH).
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
UNH stock is up 6% in after-hours trading on news that legendary investor Warren Buffett has taken a stake in the company. Through his Berkshire Hathaway holding company, Buffett secretly built a stake in UNH stock over two consecutive quarters, according to a regulatory filing with the U.S. Securities and Exchange Commission (SEC).
The Omaha-based conglomerate has bought more than five million shares of the health insurance firm for a stake worth about $1.6 billion at the end of June this year. The size is relatively small for Berkshire Hathaway, whose equity portfolio is worth around $300 billion.
Much Speculation
Given the small stake in UnitedHealth, it might be that the investment was made by one of Buffett’s two investing lieutenants, Todd Combs or Ted Weschler. Speculation ran rampant about what the mystery stock might be, with online posts claiming it was likely an industrial company or an insurer, two of Buffett’s favorite sectors of the economy.
Buffett’s last mystery stock was also an insurer, Swiss company Chubb (CB). The Oracle of Omaha, as Buffett is known, is fond of insurance companies and the cash they generate through premiums paid by policyholders. Berkshire Hathaway often requests confidential treatment when building a new position in a stock to reduce price movements and volatility from copycat investors.
Is UNH Stock a Buy?
The stock of UnitedHealth Group has a consensus Moderate Buy rating among 24 Wall Street analysts. That rating is based on 18 Buy, four Hold, and two Sell recommendations issued in the last three months. The average UNH price target of $312.65 implies 19.53% upside from current levels.
