In a recent regulatory filing, Berkshire Hathaway disclosed a significant new investment in UnitedHealth, purchasing over 5 million shares valued at approximately $1.6 billion. This move, which positions UnitedHealth as the 18th largest holding in Berkshire's portfolio, comes as a surprise given the insurer's current struggles, including a near 50% decline in stock value this year and ongoing scrutiny from the Justice Department regarding its Medicare billing practices.
Despite the challenges facing UnitedHealth, including the recent resignation of CEO Andrew Witty and a reduced earnings outlook, the stock experienced a 6% increase in after-hours trading following the announcement of Berkshire's investment. The decision is notable, particularly as Warren Buffett has historically sought undervalued companies, and it remains uncertain whether he or his investment managers, Todd Combs and Ted Weschler, were primarily responsible for this purchase.
Berkshire Hathaway also made several other investments last quarter, acquiring stakes in companies such as steel manufacturer Nucor, outdoor advertising firm Lamar Advertising, and security company Allegion. Additionally, the conglomerate re-entered the homebuilding market with investments in Lennar and DR Horton. Following these announcements, Nucor shares rose by nearly 8%, while both Lennar and DR Horton saw increases of about 3%.
In terms of portfolio adjustments, Buffett has reduced his positions in Bank of America and Apple, with the Apple stake cut by approximately 7%. As Buffett prepares to transition from CEO to chairman, with Greg Abel set to take over operational leadership, the future management of Berkshire's extensive equity portfolio remains a point of interest for observers.