The selloff that created this opportunity was driven by a perfect storm of setbacks between December 2024 and August 2025. Pricing pressures were already building in late 2024, and the new year brought heightened regulatory scrutiny alongside the tragic murder of a former executive. In April, UnitedHealth cut its full-year guidance, and by May it suspended guidance entirely as Andrew Witty stepped down and former CEO Stephen Hemsley returned. Surging medical costs pushed the medical care ratio to 89%, intensifying investor concerns over profitability and stability. These shocks drove sentiment to new lows, with shares briefly collapsing below $250, down from nearly $600 in December. While near-term challenges remain, the underlying fundamentals appear more resilient than the headlines suggest. Many of the pressures are cyclical rather than structural, driven by temporary mismatches in utilisation and pricing that have surfaced in managed care before, rather than reflecting a fundamental breakdown of the business.

UNH is far more than a health insurance company, with roughly 50% of its operating earnings coming from its health services business, Optum. Despite challenges in the insurance division, Optum continues to deliver, generating over $16 billion in operating earnings last year. Optum’s scale across pharmacy benefits, care delivery, and health analytics, combined with UnitedHealthcare’s insurance operations, forms a diversified platform with a competitive moat that is extremely difficult to replicate. Looking ahead, the 2026 Medicare Advantage repricing cycle could serve as an important catalyst, with pricing expected to reset and potentially restore margins by around 4.5%.

At High Street, we have been long-term shareholders and stand alongside Buffett and other disciplined investors who view this as a temporary market mispricing that presents a compelling long-term opportunity. With Optum’s durable franchise, upcoming industry repricing, and much of the downside already reflected in the stock, we remain confident in UnitedHealth’s ability to compound value over the years ahead.

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