At the start of 2026, Greg Abel succeeded Warren Buffett as CEO of Berkshire Hathaway (BRKA 0.69%) (BRKB 0.79%). So far, Buffett's successor has not made any significant changes to what Berkshire Hathaway owns. Nor has he sought to divest any of Berkshire's core equity positions, such as quintessential Warren Buffett investments like American Express or Coca-Cola.
However, as disclosed in Berkshire's latest 13F filing with the Securities and Exchange Commission (SEC), Abel, who now oversees 94% of Berkshire's stock portfolio, has conducted a bit of "portfolio spring cleaning," exiting some of the company's smaller positions in well-known publicly traded companies.
Among this group of now-past holdings was Berkshire's equity stake in UnitedHealth Group (UNH +1.62%), famously acquired last year following an extended sell-off for the healthcare company's shares. As of Dec. 31, Berkshire owned approximately 5.1 million shares of UnitedHealth stock. By March 31, Berkshire had completely exited its position.
In time, it could prove questionable whether Abel made the right decision in exiting so many positions during Q1 2026. However, despite the healthcare stock's recent rally, I believe that Abel made the right call.
Image source: The Motley Fool.
Greg Abel makes sweeping changes to Berkshire's portfolio
UnitedHealth wasn't the only Warren Buffett investment Abel decided to "take the money and run" on. During Q1, Berkshire also exited positions in Amazon, Domino's Pizza, Mastercard, and Visa. Todd Combs likely initiated these positions. The former GEICO CEO co-managed Berkshire's portfolio until late last year, when he resigned to take on an executive role at JPMorgan Chase.
Much of the proceeds from these stock sales likely went into Berkshire's new positions in Delta Airlines and Macy's, as well as its more-than-tripling down on shares in Google parent Alphabet. With these recent sales, only time will tell whether Abel made the right call.
NYSE: BRKB
Key Data Points
For instance, I believe that Mastercard and Visa, both still benefiting from the "digitalization" of payments, will remain a great long-term opportunity for investors. That said, while Berkshire cashed out of its UnitedHealth position right before the stock's recent extended rally, it doesn't mean Abel "sold too early."
Despite the latest wave of renewed bullishness, holding onto gains, much less keeping on them, could prove challenging.
Why a further comeback remains questionable
UnitedHealth Group shares have already pulled back following the news of the Berkshire sale. Perhaps the market is giving credence to the company's decision to sell. While initiated by Combs, Abel, and in turn, Buffett, still Berkshire's Chairman, like made an active decision to exit the position.
Thanks to a well-received earnings report and bullish news regarding Medicare reimbursement increases, UnitedHealth shares are up over 40% since April 1. However, even UnitedHealth's management has conceded that the company's turnaround remains a work in progress.
NYSE: UNH
Key Data Points
Further progress with the turnaround is likely necessary for shares to climb further or to avoid another pullback. Currently, the stock trades for around 21 times forward earnings. This valuation may be middle of the pack compared to other managed healthcare stocks, but it's largely based on rising expectations for 2026 earnings. Current forecasts, in line with management's latest guidance, call for earnings growth of around 12.3%. Falling short may trigger another sell-off in shares.
Over the longer term, the company likely needs to sustain double-digit earnings growth. If subsequent Medicare increases and/or plans to use artificial intelligence (AI) to lower overhead costs fail to deliver, earnings growth could take a hit. If this happens, forget about the stock climbing back toward above $600 per share. Instead, the stock could be on its way back to $300 per share or less.
In light of this uncertainty, it's understandable that Berkshire has placed this stock in the "too hard" pile and is looking for new opportunities elsewhere.
