STORY: Shares of UnitedHealth Group surged more than 13% Friday morning after a fresh investment from billionaire Warren Buffett's Berkshire Hathaway boosted investor confidence in the troubled health insurance company.
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Berkshire owned about $1.6 billion worth of stock as of June 30, according to a U.S. Securities and Exchange Commission filing.
Several hedge funds also bought shares according to other filings.
The company is dealing with a variety of issues, including rising costs, a federal investigation into its government-backed health plans, and the murder of its insurance unit chief in December.
Long hailed as a reliable earnings performer, UnitedHealth missed Wall Street's profit expectations for the last two quarters.
The stock has fallen 40% this year, making it the worst-performing stock on the blue-chip Dow Jones Industrial Average during that time.
Buffett has a history of swooping in with big investments in companies at critical low points including when he took a stake in Goldman Sachs at the height of the global financial crisis in 2008.
One investor called the move a “vote of confidence” for the stock but said UnitedHealth’s management “needs to regain trust and credibility with investors,” and get back to its pattern of topping financial expectations and raising its guidance.
Other health insurers like Humana and Cigna also rose Friday morning.
