With pundits predicting the downfall of UnitedHealth Group (UNH) amid an alleged billing fraud scandal, some savvy investors are quietly buying the dip, betting on a strong rebound once public perception catches up with the company’s fundamentals.
Investors Observer reported last week that UnitedHealth’s recent sell-off has left it among Wall Street’s most oversold stocks. Renowned value investor Chris Davis — founder of Davis Advisors — appears to agree. Company filings show that in the second quarter, Davis purchased more than 1 million shares at an average price of $311.
As of June 30, Davis Selected Advisers held 107 positions, with UNH accounting for 1.89% of the portfolio. The firm’s stake in UnitedHealth rose to 1,132,885 shares following the second-quarter purchases - a figure also confirmed by investment data provider Quiver Quantitative.
Other notable holdings include Meta Platforms (META), Alphabet (GOOG), Tyson Foods (TSN), U.S. Bancorp (USB), and Wells Fargo (WFC).
“Chris Davis isn’t your ordinary hedge fund manager,” wrote Oguz Erkan, analyst and author of the Capitalist Letters newsletter. “He is one of the best value investors of our time.”
Financial commentator Dividend Dude, known for providing stock market analysis, echoed the sentiment, noting that “Hedge funds continue loading up on UnitedHealth.”
Davis’s investing acumen has drawn praise from Warren Buffett and Charlie Munger, which explains why he has served as an independent director on Berkshire Hathaway’s board since 2008.
“Massive” recovery for UNH incoming?
Contrarian investors are increasingly convinced that UnitedHealth’s yearlong slump offers a rare chance to buy the insurance giant at valuations not seen in years.
Analyst Mike Investing compares the current setup to Meta Platforms in 2022, when the stock bottomed before staging a powerful rebound. Like others, he notes that institutions and other large investors continue accumulating UnitedHealth shares.
$UNH will see a massive V shape squeeze soon…
undefined Mike Investing (@MrMikeInvesting) August 10, 2025
Institutions and Whales continue to load such as Chris Davis who added $1 Million into $UNH.
This setup is identical to $META in 2022 which has now rallied 800%+ from its lows.
$600+ incoming next year for $UNH.
Mark my words… pic.twitter.com/BviekqJBVB
The stock recently hit fresh lows below $235, capping a year-to-date decline of over 50% and a 12-month drop of over 55%. At those levels, the company’s market cap has fallen to around $227 billion.
Although UnitedHealth delivered disappointing second-quarter earnings, companywide revenue still rose 12.9% year over year to $111.52 billion.
Within its Optum division, both the OptumRx and Optum Insight segments posted revenue growth compared to the prior year.
While contrarian investors may ultimately be vindicated, their conviction could take time to pay off - UnitedHealth has lowered its full-year earnings forecast to $16 per share.
That marks a huge drop off from its initial forecast of between $26 and $28 per share in earnings.
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