What Happened?

Shares of health insurance company UnitedHealth (NYSE:UNH) fell 12.5% in the pre-market session after The Wall Street Journal reported that the Department of Justice is investigating the company regarding concerns linked to its Medicare billing practices. The DOJ is looking into how UnitedHealth records diagnoses that could lead to extra payments under Medicare Advantage plans (offered by private insurers, who get a fixed payment from the government to manage healthcare for seniors).

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy UnitedHealth? Access our full analysis report here, it’s free.

What The Market Is Telling Us

UnitedHealth’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. Moves this big are rare for UnitedHealth and indicate this news significantly impacted the market’s perception of the business.

UnitedHealth is down 7.7% since the beginning of the year, and at $465.89 per share, it is trading 25.5% below its 52-week high of $625.25 from November 2024. Investors who bought $1,000 worth of UnitedHealth’s shares 5 years ago would now be looking at an investment worth $1,545.

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