UnitedHealth posts worst monthly drop since 2009 amid negative headlines

UnitedHealth Group (NYSE:UNH) ended a tumultuous May on Friday, ending the month with nearly a 27% decline, its worst since 2009, as regulatory concerns and a leadership transition jolted the managed care giant.

The downtrend began on May 12 when UNH traded lower with its rival pharmacy benefit managers, Cigna (CI) and CVS Health (CVS), after President Donald Trump, just before reviving its most-favored-nation policy to lower U.S. drug prices, threatened to “knock out” PBMs.

A day later, the UNH stock sold off after the company pulled its 2025 outlook as its chairman of the board, Stephen Hemsley, took over the leadership following the abrupt resignation of former CEO Andrew Witty.

Witty, a former GSK (GSK) CEO, has presided over UnitedHealth (NYSE:UNH) through one of its most challenging periods, marked by the murder of Brian Thompson, the former CEO of its insurance unit, in December.

More bad news awaited UnitedHealth (NYSE:UNH) on May 14 when The Wall Street Journal reported that the Department of Justice (DoJ) had launched a criminal probe over potential Medicare fraud at the company. Shares of the Eden Prairie, Minnesota-based firm fell ~11% in reaction.

Another report from The Guardian about alleged payments made by UnitedHealth (NYSE:UNH) to nursing homes that helped it win Medicare enrollees sent UNH stock to fresh lows on May 21.

However, as the company’s shares hovered near a four-year low amid negative publicity, UnitedHealth’s (NYSE:UNH) insiders purchased more than $32M worth of UNH stock in May. Notable insider purchases included $25M worth of stock bought by new CEO Hemsley on May 16.

While Bank of America, TD Securities, and HSBC were among Wall Street firms that downgraded UNH in reaction to turbulence, many Seeking Alpha analysts reiterated their bullish views. “Long-term, this selloff will very likely prove to be a wonderful buying opportunity,” SA Investing Group Leader Quad 7 Capital wrote this week.