The Motley Foolยท2025-08-23 14:10Core Viewpoint - Berkshire Hathaway's stock has declined approximately 10% following the announcement of Warren Buffett stepping down as CEO, primarily due to a contracting valuation multiple as investors reassess the company's worth without his leadership [2][3]. Investment Activity - Berkshire Hathaway has been net selling stocks for 11 consecutive quarters, with significant sales in Apple and Bank of America, while Buffett made a notable investment of around $2 billion in a value stock during the second quarter [3][6]. - Buffett sold 20 million shares of Apple and 26 million shares of Bank of America in the second quarter, contributing to a total of $6.9 billion in stock sales [6]. Valuation Considerations - The forward PE ratio for Apple was between 27 and 29 during most of the quarter, significantly higher than the single-digit multiple Buffett paid in 2016 [8][9]. - Bank of America stock's price to tangible book value exceeded 1.7, which is considered expensive, especially given the current economic conditions [10]. UnitedHealth Group Investment - UnitedHealth Group has faced challenges, including a decline in net margin from 4.3% to 3.1% year-over-year and a revised earnings outlook, now expecting "at least" $16 in earnings per share, down from $27.66 [13]. - The company is under investigation by the DOJ regarding its Medicare Advantage program, which could lead to significant financial penalties [14]. - Despite these challenges, UnitedHealth maintains a strong competitive position due to its scale, which provides negotiating leverage and a solid balance sheet with $32 billion in cash [15][17]. - The stock trades at about 16 times the 2026 earnings per share estimates, with expected annual EPS growth of 13% to 16%, presenting a potential investment opportunity [18].