Dodge and Cox Increased its Holdings in UnitedHealth Group Incorporated (UNH) Amid Current Challenges

Dodge & Cox Fund, an investment management company, released its “Dodge and Cox Stock Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The Stock Fund — Class I – returned 3.82% and Class X returned 3.85% in the second quarter vs the S&P 500 Index’s 10.9% return and the Russell 1000 Value Index’s 3.79% return. In the second quarter, geopolitical uncertainty and rapidly changing economic proposals led to increased volatility in the US markets.  In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, Dodge and Cox Stock Fund highlighted stocks such as UnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company that operates through UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx segments. The one-month return of UnitedHealth Group Incorporated (NYSE:UNH) was -6.17%, and its shares lost 49.49% of their value over the last 52 weeks. On July 21, 2025, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $282.14 per share, with a market capitalization of $255.94 billion.

Dodge and Cox Stock Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2025 investor letter:

"In the second quarter, we continued to add to holdings in the Health Care sector and trim select holdings in Financials, consistent with actions begun in early 2024. We increased the Fund’s position in UnitedHealth Group Incorporated (NYSE:UNH), the largest U.S. health insurer, after the company’s valuation reached an 11-year low due to disappointing earnings, continued regulatory concerns, and management changes.3 Its Medicare Advantage (MA) business has been especially weak, mirroring trends at the other largest MA participants (Humana and CVS, companies the Fund also owns). Despite the current challenges, we believe UnitedHealth has a strong position across its major markets and MA profitability is likely to recover. We are also optimistic that UnitedHealth’s returning CEO Stephen Hemsley (who came out of retirement in May) can help improve operational efficiency and margins."

UnitedHealth Group Incorporated (NYSE:UNH) is in 18th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 139 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the first quarter, which was 150 in the previous quarter. While we acknowledge the potential of UnitedHealth Group Incorporated (NYSE:UNH) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered UnitedHealth Group Incorporated (NYSE:UNH) and shared the list of most undervalued healthcare stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.