UnitedHealth Group (UNH) Slid Due to Decline in Investor Confidence

PGIM, an investment management company, released its “PGIM Jennison Health Sciences Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equities in the second quarter of 2025 experienced significant volatility, as the steep sell-off that initiated at the beginning of the quarter ultimately led to a strong recovery. The S&P 1500 Health Care Index declined 6.9% in the second quarter, underperforming the S&P 500’s 10.9% return. Health care providers & services, life sciences tools & services, biotechnology, and pharmaceuticals underperformed the Index in the quarter. While healthcare technology and medtech gained in the quarter. In June, the S&P 1500 Health Care Index (the Index) gained 1.9%, lagging the S&P 500, which advanced 5.1%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, PGIM Jennison Health Sciences 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 16.38%, and its shares lost 38.80% of their value over the last 52 weeks. On September 24, 2025, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $351.81 per share, with a market capitalization of $318.625 billion.

PGIM Jennison Health Sciences Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2025 investor letter:

"UnitedHealth Group Incorporated (NYSE:UNH) is the largest healthcare services company in the U.S. United offers health insurance to Americans who receive insurance through their employers and also through government-based programs such as Medicare and Medicaid. United also has a health technology and services unit called Optum. The stock continues to be challenged as investors have lost confidence in the ability for the company's management to execute. Three weeks after cutting guidance, United suspended its financial guidance and fired its CEO. The culprits of the problems continue to be underwriting in Medicare Advantage (MA), trend in MA, and the margins and trend in its Optum Health physician business. We expect the company to improve pricing and margins over the next few years. In addition, insider stock buying by multiple directors and the new CEO does inspire some level of confidence that management expects improvement. We will be watching trend dynamics in the near-term, margin expansion opportunities over the next couple of years, and look for the company to re-institute financial guidance in late July with its Q2 financial release."

UnitedHealth Group Incorporated (NYSE:UNH) is in 18th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 159 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the second quarter, which was 139 in the previous quarter. In the second quarter of 2025, UnitedHealth Group Incorporated (NYSE:UNH) reported revenues of nearly $112 billion, up 13% over the prior year’s 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 Mairs & Power Balanced Fund's views on the company. 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.