Up 37% Since August, Is It Safe to Buy UnitedHealth Group Stock Again?

Core Viewpoint - UnitedHealth Group's stock has experienced a significant rally, primarily driven by Berkshire Hathaway's investment, despite facing challenges such as rising costs and a Department of Justice investigation into its billing practices [1][2][8]. Financial Performance - UnitedHealth reported a 12% year-over-year increase in consolidated revenue, reaching $113.2 billion [6]. - The company's net margin was reported at 2.1%, which was considered disappointing [6]. - Full-year earnings per share guidance was raised to at least $14.90, up from a previous estimate of $14.65 [6]. Stock Valuation - Prior to the recent rally, UnitedHealth's stock was trading at a price-to-earnings (P/E) multiple of around 10, indicating deep value [3]. - Following the rally, the P/E multiple increased to 17, suggesting that the stock is still relatively affordable [3]. Strategic Moves - UnitedHealth is exiting Medicare Advantage markets to improve profitability, a move that has been met with controversy [5]. - The company is focused on enhancing its financial outlook amidst challenges such as government funding cuts and rising costs [5]. Market Reaction - Since August, UnitedHealth's stock has climbed 37% in value, largely attributed to the news of Berkshire Hathaway's investment [2]. - The stock's recent performance has sparked discussions about its potential as a safe investment again, although uncertainties remain [8][9].