What Happened?
Shares of health insurance company UnitedHealth (NYSE: UNH) fell 16% in the morning session after the Wall Street Journal reported that the Justice Department was investigating the company for possible Medicare fraud. Such investigations typically trigger investor concern due to the potential for significant financial penalties, legal costs, and reputational damage.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy UnitedHealth? Access our full analysis report here, it’s free.
What The Market Is Telling Us
UnitedHealth’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for UnitedHealth and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 16% on the news that the company announced the unexpected departure of its CEO, Andrew Witty, for personal reasons, leading to uncertainty in leadership as former CEO Stephen Hemsley returns. Also, it suspended its full-year 2025 financial outlook, citing a continued acceleration in care activity and higher-than-anticipated medical costs, particularly within its Medicare Advantage plans.
UnitedHealth is down 47.5% since the beginning of the year, and at $264.66 per share, it is trading 57.7% below its 52-week high of $625.25 from November 2024. Investors who bought $1,000 worth of UnitedHealth’s shares 5 years ago would now be looking at an investment worth $909.61.
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