EXCLUSIVE: UnitedHealth Gets Dumped, Why This Asset Manager Says Insurer Is No Longer A Safe Bet

UnitedHealth Group Inc's (NYSE:UNH) recent nosedive wasn't just a chart pattern — it was a conviction breaker.

Tom Hulick, CEO of Strategy Asset Managers, didn't wait for a rebound. He dumped the stock, citing "a deterioration in fundamentals" in exclusive insights shared with Benizinga over email.

UnitedHealth’s stock is down over 42% year-to-date, over 31% down in the past month alone.

Asset Manager Walks Away From UNH Stock

The asset manager's exit from UnitedHealth stock followed a string of gut punches for UnitedHealth: an unexpected CEO resignation, fiscal 2025 guidance withdrawal, and what Hulick called "a rare earnings miss and downward revisions to EPS." But the real red flag?

A company that always looked forward suddenly stopped doing so. "When a perennial compounder stops providing forward guidance and leadership turnover coincides with performance slippage, it's a signal to pay attention."

Read Also: UnitedHealth CEO, Other Insiders Buy Millions In Stock As It Sinks Over 23% In A Week

The Storm Brewing In Medicare Advantage

And Hulick's attention is now on a storm brewing in Medicare Advantage. Once UnitedHealth's profit engine, it's now showing signs of burnout. "Rising utilization, tighter reimbursement, and structural adjustments tied to the CMS risk model transition" have created a perfect storm, Hulick said, adding that "margin compression at a scale that can't be resolved with typical cost controls" could lead to slower growth or even retrenchment.

The broader picture isn't much rosier for the managed care sector. With regulators circling and medical loss ratios climbing, Hulick says the core business model is losing its shine. "The upside appears capped relative to prior cycles," he said, noting a shift in the defensive-growth balance that "is not necessarily in favor of the incumbents."

Going Long On Science, Instead

So where is the $700 million manager putting its chips? Hulick is going long on science. "We're investing in innovation-driven segments that offer idiosyncratic upside and aren't tethered to reimbursement dynamics."

That includes early-stage biotech, gene editing, and longevity plays – plus global insurance firms like Arthur J. Gallagher & Co. (NYSE:AJG), which Hulick says have "demonstrated durable growth, pricing power, and operate in areas less exposed to the volatility we're seeing in U.S. health insurance."

UNH may be the canary in the managed care coal mine. While Hulick sees "rising costs, regulatory friction, and deteriorating visibility" across the sector, he singles out UnitedHealth as "uniquely exposed" given its size, complexity, and "integration challenges-especially with Optum."

The firm has exited UnitedHealth across three equity strategies but is holding onto bonds maturing in 2026 – one place where Hulick still sees strength. "The A+ rating and balance sheet strength remain intact."

But in equities, the message is clear: "The focus now is on innovation, not incumbency."

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