I’m always interested in the Berkshire Hathaway 13F filing. While it’s often hard to tell which buys and sells are made by Warren Buffett and which are by other managers, there’s often a lot to learn.
The most recent update is a good illustration of this. The name investors are focusing on is US health insurer UnitedHealth Group (NYSE:UNH), but I think there’s a consistent theme across the board.
UnitedHealth
The challenges UnitedHealth has been facing recently are well-documented. The firm’s earnings per share have been both in decline and short of analyst expectations for the last two quarters.
The big issue has been its Medicare Advantage programme. In short, claims have been more frequent and more expensive than anticipated.
This is a frequent risk for insurers, who have to price policies in advanace of finding out how much they might have to pay out. But there is something positive about for UnitedHealth.
The firm’s policies typically last for a year, which means there’s scope to reprice them after 12 months. And this gives the company a chance to make up for any losses relatively quickly.
In the short term, however, earnings have been falling and the situation doesn’t look good. And Buffett’s firm has been taking advantage of the weak share price to make a big investment.
US health insurance isn’t exactly my strong suit, so I’m not buying the stock myself. But this is a sector that Buffett knows well, so it’s interesting to see Berkshire taking a position.
Other bets
During the second quarter of 2025, Berkshire also added to its stakes in Chevron, Constellation Brands, and Dominos Pizza. All of these look like stocks investors are worried about right now.
Oil prices have come down significantly since the start of the year. And that’s causing producers to be a bit more cautious about which operations they maintain and invest in.
Halliburton – one of the largest oilfield services companies – recently reported weak demand in several regions. That’s a bad sign for production levels this year, which isn’t good for Chevron.
Elsewhere, the rise of GLP-1 drugs is reported to be weighing on the amount of food people consume. And it’s hard to imagine a more obvious potential victim of this than Dominos.
Anti-obesity medication also seems to be inhibiting alcohol consumption, so Constellation Brands is another company that could be negatively affected. But it also has another issue.
As the largest importer of wine in the US, the prospect of tariffs creates an additional threat. So it’s fair to say investor sentiment around the stock is generally negative at the moment.
Looking for opportunities
Buffett – or more specifically, Berkshire Hathaway – clearly thinks the market is overestimating the current challenges. And there’s a possibility they might be right.
The investment in Chevron is almost certainly a reflection of Buffett’s long-term view on oil prices. The Oracle of Omaha has frequently expressed the view that demand will be strong over time.
Both Constellation Brands and Dominos benefit from strong competitive positions. So if the immediate threats are less significant than they seem, these could turn out very well.
With my own investing, I’ve been looking at other names in these industries. And while I prefer to chart my own course, it’s nice to see Berkshire’s managers having similar ideas.
