UnitedHealth Stock Has Rallied Big Since Berkshire Bailed. Did Warren Buffett and Greg Abel Blink Too Soon?
2026-07-28 23:30
•Brett Schafer •The Motley Fool
••••• ••• Axe Cap view
Berkshire's Exit from UnitedHealth: Mistimed or Justified?
UnitedHealth’s rebound after Berkshire’s sale highlights recovery potential amid healthcare inflation.
Berkshire Hathaway’s decision to offload UnitedHealth in early 2026 looks premature in hindsight. The stock’s quick rebound to $428 from below $380 demonstrates the market’s growing confidence in the company’s improving profit margins as the medical loss ratio normalizes. For South African investors, the UnitedHealth story echoes broader themes around healthcare inflation and cost management—topics relevant to insurers and medical providers listed locally. Although South African medical insurers aren’t direct comps, currency plays a role. The USD/ZAR’s recent stability cushions import-driven cost inflation but any rand weakness could pressure local healthcare costs. UnitedHealth’s forward earnings potential of $25-30 billion at a 15 times forward P/E ratio suggests undervaluation, which contrasts with Berkshire’s exit on a loss. However, US healthcare policy shifts can quickly change fundamentals, and similar local regulatory risks remain near-term concerns here. If US insurers falter, risk appetite for South African financials like Sanlam or Capitec might be tested too. this is just our opinion and not financial advice
Watch UnitedHealth from the sidelines due to US-specific risks but remain selective on South African insurers given local currency risks. Trim exposure if USD/ZAR strengthens sharply, as rand depreciation would inflame healthcare inflation locally.
- UnitedHealth (UNH)
- USD/ZAR
- Sanlam
- Capitec
- US healthcare policy changes
- USD/ZAR volatility impacting local inflation
6/10
Berkshire Hathaway sold its UnitedHealth Group position in Q1 2026 at a loss after buying around $380/share in Q2 2025. The stock has since rebounded to $428, driven by improving profit margins as the company recovers from elevated medical loss ratios in 2025. UnitedHealth's medical care ratio is normalizing, and with strong secular tailwinds from healthcare inflation and potential earnings recovery to $25-30 billion, the stock appears undervalued at current levels.
Our take is based on reporting first published by The Motley Fool.