It’s no secret that UnitedHealth (UNH) stock has been taken to the cleaners in 2025. Besieged by a series of challenges, both external and self-inflicted, the one-time long-term compounder has seen its stock price gutted, falling about 47% over the past year (not to mention 50% from its 52-week high).
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Although recent performance has been lackluster, I remain Bullish on UnitedHealth at its current levels. Three factors make the stock an attractive opportunity: notable accumulation by super-investors, a discounted valuation following the pullback, and its appeal as a dividend play, offering both an above-average yield and a strong track record of dividend growth.
Why Super Investors are Buying UNH
While sentiment on UNH has been poor, a variety of renowned investors managing significant capital clearly saw value in the company’s beaten-down shares and took advantage of the opportunity to add the stock to their portfolios at depressed levels.
UNH gained momentum after 13F filings revealed that Warren Buffett’s Berkshire Hathaway (BRK.B) initiated a position in the stock during Q2 2025, sparking a rally from the lows. The filing showed Berkshire purchased 5,039,565 shares at an average reported price of $311.97, building a stake valued at roughly $1.6 billion.
The move bore all the hallmarks of a Buffett investment. The Oracle of Omaha is well known for being greedy when others are fearful and buying shares of high-quality companies when they are trading at discounted valuations in times of distress. Many within the investment world view Buffett’s buy as a stamp of approval for a stock. While Buffett’s involvement is indeed encouraging, it is worth noting that UNH remains a relatively small position within Berkshire’s substantial portfolio — the $1.57 billion investment accounts for just 0.6% of Berkshire’s equity portfolio.
Buffett wasn’t the only “super investor” buying shares of UNH during the second quarter. Billionaire investor David Tepper of Appaloosa Management (also owner of the NFL’s Carolina Panthers) already had a position in UNH, but increased it by 1,300% during the quarter to 2.45 million shares, with an average price of $311.97. Interestingly, hedge fund manager John Gunn of Dodge & Cox acquired 2.7 million shares—twice the size of Buffett’s purchase. Around the same time, Gunn’s hedge fund disposed of ~738,000 Microsoft (MSFT) shares, as part of a selling cascade dating back to last year, according to TipRanks data.
Michael Burry—best known from The Big Short—also opened a position in UNH earlier this year. According to the latest filings, the stake accounted for roughly 11% of Scion Asset Management’s U.S. equity portfolio, with shares acquired at a reported price of $311.95. Unlike Buffett, Burry is a more active trader, making it unclear whether he still holds the position. Even so, the filing indicates that the contrarian investor viewed UNH as offering solid value at prices close to current levels.
In addition to Buffett, Tepper, and Burry, other notable asset managers, including Patient Capital Management, Lone Pine Capital, and Yacktman Asset Management, also started positions in UNH during the second quarter.
What Do the Hedge Funds Think?
With such bullish sentiment buzzing, the smart institutional money likes UnitedHealth. According to TipRanks’ hedge fund tracker, UNH is currently seen with high confidence by hedge fund managers on Wall Street.
According to 13F filings from 86 hedge funds submitted to the U.S. SEC over the past quarter, as UNH has seen lower lows, hedge fund managers have increased their stakes from around 20 million shares in May 2025 to around 44 million today. The current Confidence Signal based on 16 leading hedge funds is Very Positive.
Appealing Dividend Allows Long-Term Bulls Time to Wait
UNH isn’t just about growth—it’s also a dividend powerhouse. With a yield of 2.8%, more than double that of the S&P 500, the stock pays investors handsomely to wait. Even better, UNH boasts a stellar track record of reliability, stringing together 15 consecutive years of dividend hikes—a streak that underscores its strength and shareholder-friendly focus.
Undemanding Valuation Allows UNH Bulls to Take Charge
One thing many of these super investors likely see in the stock is its attractive valuation. Shares trade for about 19.5x 2025 earnings estimates, which isn’t particularly appealing, but represents a tangible discount to the broader market — the S&P 500 (SPX) trades for 22x forward earnings estimates.
Additionally, the stock’s earnings power has clearly taken a hit this year, as medical costs are rising faster than the company’s premiums and the company has underestimated medical utilization rates for its Medicare Advantage plans. However, further out, consensus analyst estimates expect earnings to rebound from $16.24 in fiscal 2025 to $18.08 in 2026, making the stock look cheaper at 17.4x 2026 earnings estimates.
Is UNH Going to Recover?
Currently, Wall Street appears to share a similar view with the hedge fund managers. UNH earns a Strong Buy consensus rating based on 17 Buys, two Holds, and one Sell rating assigned in the past three months. Despite the superb ratings, the average UNH stock price target remains stuck at $317.80 — below the current market price, which initially suggests that Wall Street analysts expect the stock to fall ~3.5% over the coming twelve months. However, the inside track is that UNH will ultimately recover from its many woes, which explains the strong buy recommendation despite the many bearish factors currently affecting the stock.
From Fear to Opportunity: UNH’s Pullback is a Strong Buy
UNH shares have struggled over the past year, but the current weakness may present a compelling entry point. Legendary investors like Warren Buffett, David Tepper, and Michael Burry are rapidly turning to greed as others see their fears, thereby scooping up shares of this long-term winner at discounted prices—and regular investors have the chance to follow suit. With a reasonable valuation, an attractive dividend yield, and 15 years of consistent dividend growth, UNH stands out as a strong buy at today’s levels of ~$325 per share.