Shares of UnitedHealth Group (UNH 12.04%) are jumping on Friday, up 13.8% as of 2:14 p.m. ET. The spike comes as the S&P 500 (^GSPC -0.29%) declined 0.1% and the Nasdaq Composite (^IXIC -0.40%) fell 0.3%.
The troubled health insurance giant is finally seeing its stock rebound after months of trouble, thanks to the purchase of 5 million shares by Warren Buffett's Berkshire Hathaway.
Berkshire buys UNH
Berkshire Hathaway's latest regulatory filing revealed that the company took a considerable stake in UnitedHealth. The 5 million-share, $1.6 billion stake makes the massive health insurer the 18th-biggest position in Berkshire's portfolio. Buffett's company also trimmed its positions in Apple and Bank of America.
The move took Wall Street by surprise, given the many issues UnitedHealth faces, and the revelation sent shares soaring immediately.
UnitedHealth is struggling
The company's most recent quarterly report revealed a darkening financial picture, including a significant miss on earnings per share, as costs from medical care continue to balloon. The company was also forced to suspend guidance as it tries to adapt to the shifting market.
Image source: Getty Images.
Its financial woes are far from the company's only issues, having recently suffered the sudden departure of its CEO for "personal reasons." The departure comes as the company faces two Department of Justice (DOJ) probes -- one criminal and one civil -- into its Medicare billing practices.
Buyer beware
It's hard to disagree with the Oracle of Omaha, but there are just too many issues facing UnitedHealth at the moment and with no clear picture of an imminent turnaround. I would stay away from the stock.
