Down 25%, should investors buy this stock for less than Warren Buffett?

During the second quarter of 2025, Warren Buffett’s Berkshire Hathaway invested around $1.6bn in UnitedHealth (NYSE:UNH). But the share price is down around 25% since then.

Chances to get a better deal than the Oracle of Omaha don’t come around very often. So should investors seize the opportunity and buy shares?

UnitedHealth

UnitedHealth has been through a lot recently. This includes the almost unimaginable event of the company’s CEO being shot on the way to an investor meeting.

Other challenges have included rising medical costs, which haven’t been offset by higher premiums. And the firm is also being investigated in a couple of different ways. 

One focuses on the way the firm classifies its patients. The concern is that it might be exploiting the system to attract higher revenues by aggressively treating patients as more sick than they might be.

Another is concerned with the relationship between the company’s insurance arm and its provision unit. There’s a potential issue of charging competing insurers higher prices.

UnitedHealth’s Q4 earnings were strong as its vertical integration helped limit the effect of higher care costs. But while this helps with the firm’s resilience, there’s a lot of uncertainty.

I think this means investors need to be honest with themselves. It’s one thing for Buffett – an insurance specialist – to see a potential opportunity, but not everyone has this level of insight.

Molina

Molina Healthcare (NYSE:MOH) is another US healthcare provider. Michael Burry might be bullish on the Medicaid specialist, but the share price crashed 33% in response to the firm’s Q4 earnings.

It’s easy to see why – the firm faced a number of challenges. Medical costs increased and changes to the classification system also caused them to receive less money for patients needing more care.

On top of this, there were one-off adjustments and setup costs that dragged earnings down even further. And the company doesn’t expect things to improve until 2027. 

Setting rates is out of Molina’s hands and that means there’s always risk. Importantly, though, the firm has a clear long-term competitive advantage that’s still firmly intact.

Compared to other companies, the firm has much lower costs. This comes from focusing exclusively on government-funded programmes and migrating all new patients onto a single system. 

This puts the firm in a much better position to make it through a downturn in 2026. As a result, I actually see the falling share price as a potential buying opportunity. 

Investing with the best

There’s some disagreement about whether the UnitedHealth investment was made by one of Berkshire’s other managers. But a lot of people think it has the hallmarks of a Buffett investment.

Even so, investors can’t just follow Berkshire into the stock without paying close attention. One of the things Buffett says frequently is that investors should stay within their own circle of competence. 

Molina, however, has some long-term advantages that I think even an investor like me can understand. The firm has a cost advantage over its rivals and it’s easy to see why that’s important.

As a result, I think the crashing share price makes the stock look very attractive. So – for my own reasons – I’m going with Michael Burry over Warren Buffett on this one.

The post Down 25%, should investors buy this stock for less than Warren Buffett? appeared first on The Motley Fool UK.

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Stephen Wright has positions in Berkshire Hathaway and Molina Healthcare. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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