Recently, I made an impulse stock purchase without conducting much research. I looked left looked right, but nothing compelling caught my eye. Meanwhile, the spare USD in my account seemed to be urging me to invest in something—anything. That’s when I came across a healthcare and insurance stock from my shortlist and, without much hesitation, clicked "BUY." Pls note this is not investment advice or a BUY call.
That stock was none other than UnitedHealth Group (UHG). UHG is a leading American multinational company specializing in health care and insurance services. It operates through two primary businesses: UnitedHealthcare, which provides health benefits and insurance coverage, and Optum, which focuses on health care services, technology, and pharmacy benefits. The company serves millions of people worldwide, working with governments, employers, and health care providers to improve access to affordable, high-quality care. It's a Bonafide blue chip health care stock.
Lately, UHG has been taking a beating, with multiple negative developments occurring simultaneously. Below is a summary of some major challenges the company is currently facing:
Rising Medical Costs: After the pandemic, more patients started using healthcare services they had delayed, leading to a surge in medical claims and squeezing UnitedHealth's profit margins.
Earnings Misses and Withdrawn Guidance: The company missed earnings expectations in early 2025 and then withdrew its full-year financial guidance, which alarmed investors.
Leadership Turmoil: CEO Andrew Witty resigned abruptly, and the company reinstated a former CEO, which was seen as a sign of instability.
Regulatory and Legal Troubles: UHG is facing a criminal probe related to its Medicare Advantage program and has been accused of questionable practices, including allegedly paying nursing homes to reduce hospital transfers for Medicare patients.
Negative Publicity: The December 2024 murder of a key executive and ongoing investigations have further damaged investor confidence.
I first came across UHG through Adam Khoo’s YouTube videos. Knowing that he only invests in high-quality businesses gave me confidence in the stock. However, I admit that the main reason I bought it was simply because he holds it—without conducting much analysis myself. I realize that blindly following someone else’s investment decisions isn’t a wise move. My position in UHG isn’t large, and I don’t plan on adding more shares until I see greater clarity in how the company addresses its current challenges.
