Don't Read Too Much Into Berkshire's UNH Exit

Written by: David Mandelbaum, Portfolio Manager

We have been asked about the latest Berkshire Hathaway 13F filing showing that Berkshire exited its UnitedHealth position in Q1.

As a reminder, Berkshire originally bought roughly 5 million shares in Q2 2025, which was viewed positively at the time because it looked like a high-quality contrarian endorsement after a major drawdown in the stock.

That said, the position was always relatively small for Berkshire, and UNH was one of several stocks Berkshire exited in Q1 that appear to have been managed by Todd Combs, who left Berkshire earlier this year to join JPMorgan. In that context, we view the sale as more likely related to portfolio-manager transition and repositioning than a fresh negative fundamental view on UnitedHealth.

The timing of their exit also looks poor in hindsight. Berkshire sold during Q1, before the April 7 final Medicare Advantage rate update, which was materially better than feared, and before UnitedHealth’s strong beat-and-raise quarter later in April. Both events reinforced the UNH investment case and helped drive a sharp recovery off the levels at which the stock traded in Q1. It is also worth noting that while UNH initially traded lower on the Berkshire 13F headline, it has since recovered most of that knee-jerk weakness.

Our thesis on UnitedHealth is unchanged. We continue to view the company as one of the highest-quality scaled healthcare franchises, with leading positions across insurance, care delivery, pharmacy benefits, and healthcare data and technology. We also believe UnitedHealth is among the best-positioned companies to benefit from broader adoption of AI across the healthcare system, given its scale, data assets, workflow integration, and ability to apply technology across both payer and provider settings.

The key near-term opportunity is margin normalization and improved execution following the management change. In the UnitedHealthcare insurance business, margins have substantial recovery potential through Medicare Advantage normalization, continued commercial repricing, and a more stable Medicaid rate environment. In Optum Health, margins also have substantial room to improve as utilization pressure normalizes, provider assets mature, and value-based care execution improves. Finally, UnitedHealth generates substantial free cash flow, and we expect capital deployment to become a more visible part of the story as confidence improves, including the expected reinitiation of sizable share repurchases.

If the company can stabilize utilization, rebuild margins in both UHC and Optum Health, deploy its cash flow effectively, and restore investor confidence, we believe the stock has significant upside from current levels.

If you’d like to discuss how a more selective, evidence-driven approach may fit within your broader portfolio, we invite a confidential conversation with our investment team.

Disclaimers

David Mandelbaum is solely an investment advisor representative and a lead portfolio manager of OnePoint BFG Wealth Partners, a registered investment adviser. Investment advisory and financial planning services offered through Bleakley Financial Group LLC, an SEC registered investment adviser, doing business as OnePoint BFG Wealth Partners. 

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