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Does Michael Burry Know Something Wall Street Doesn't? The Investor of "The Big Short" Fame Just Made a Striking Move.

Group 1 - Hedge fund manager Michael Burry has made a significant investment in UnitedHealth Group, which has seen its stock price drop nearly 50% over the past year, making it his largest position in the portfolio [3][5] - Burry purchased 20,000 shares and call options on 350,000 more, indicating a strong bullish stance on the company [5][6] - UnitedHealth Group is the largest health insurer in the U.S., operating both UnitedHealthcare and Optum, and has a strong market position despite recent challenges [7][11] Group 2 - The company has faced difficulties this year, including a U.S. Department of Justice investigation into its Medicare business and rising healthcare costs, which have impacted earnings [9][12] - In the second quarter, UnitedHealth reported adjusted earnings per share of $4.08, missing analysts' expectations of $4.48, and anticipates continued pressure on earnings [9][12] - UnitedHealth is taking steps to address its challenges, such as exiting unmanageable plans, raising premiums, and utilizing artificial intelligence to improve efficiency, with expectations of reducing costs by $1 billion for Optum next year [12][16] Group 3 - Currently, UnitedHealth is trading at 13 times trailing-12-month earnings, near its lowest valuation in about a decade, suggesting it may be undervalued [15][17] - Despite recent earnings reports not being favorable, the company's leadership has identified issues and outlined plans for recovery, predicting a return to earnings growth next year [16][17]