Insiders are buying UnitedHealth stock on the crash: should you follow suit?

UnitedHealth Group Inc (NYSE: UNH) remains in freefall as investors continue to bail on the healthcare giant amidst a cascade of bad news.

First, it was the surprise exit of its chief executive, then the suspended full-year guidance, and then, most recently, there have been reports that UNH is facing a criminal investigation over possible Medicare fraud.

Still, insiders haven’t thrown in the towel on UnitedHealth stock.

In fact, some of them have loaded up on the healthcare name, indicating continued confidence in its longer-term prospects.

Insiders load up on more than 1.0 million UnitedHealth shares

UnitedHealth shares have been cut in half since April 11, but some of its top executives remain convinced that they’ll bounce back potentially in the back half of 2025.

Kristen Gil, a UNH director, for example, purchased more than 3,500 shares of the NYSE-listed firm last week for approximately $1.0 million, while two other directors, Patrick Flynn and John Noseworthy, have recently acquired 1,500 and 300 shares of the health insurer, respectively.

Their respective purchases are significant for UnitedHealth investors as they indicate that insiders currently see the healthcare stock as “undervalued” and poised for future gains.

A healthy 2.61% dividend yield makes UnitedHealth stock all the more exciting to own at the current discount.

Stephanie Link shares her bullish view on UNH stock

Market veterans, including Hightower’s chief investment strategist Stephanie Link, also see a huge opportunity in UnitedHealth shares following their recent crash.

UNH stock is currently going for just eight times EBITDA – sharply below its historical average of about 13 times.

Plus, the Relative Strength Index (RSI) at less than 15 currently suggests the Minnetonka-based firm is immensely undervalued at writing.

Link recommends owning UnitedHealth stock at current levels as a lot of the bad news is already priced in.

She has profound confidence in the leadership of Stephen Hemsley (the new chief executive of UNH) as well.

During his previous tenure from 2006 to 2017, the healthcare stock well over quadrupled in value.  

“It’s still the number one managed care company in the world, the number one market share with 151 million people. They have a strong balance sheet and $5 billion left in their buyback,” she told CNBC in a recent interview.

Now that the UNH share price has tumbled significantly, Link expects the company’s management to announce a new share repurchase programme as well.

Should you buy UnitedHealth stock on recent weakness?

Investors should also note that Wall Street analysts broadly maintain a positive stance on UnitedHealth, suggesting that the recent sell-off in its stock may have been overdone.

The consensus rating on UNH remains at “overweight,” with analysts projecting an average price target of $413. This implies potential upside of more than 30% from current levels.