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When Berkshire Hathaway’s 2Q25 13F was released last Thursday afternoon revealing that Buffett had acquired 5 million shares in reeling health insurer United Health (UNH) investors piled into the stock and it likely put a bottom in on the health insurers. While I’m long and bullish on UNH, I think there’s a better stock to play the coming rally in the health insurers as they rationalize their business in the face of lower government reimbursements and higher healthcare expenses.

Because of the size of the pool of capital Buffett is working with, he had to buy a mega-cap like UNH. But there is a smaller and less well known health insurer with an excellent track record that I believe will offer at least twice the pop of UNH on the way back up: Centene (CNC). UNH has a market cap of ~$275 billion while CNC’s is just under $15 billion – too small for Buffett to put enough capital to work in to move the needle for Berkshire.

While Centene is less well known than United Health, it’s a quality business with an excellent long term track record. When CNC withdrew guidance on July 1, the stock plummeted on fears that things were just as bad with it as UNH. On its 2Q25 earnings call on July 25, CNC confirmed how bad things are going to be this year when it lowered full year EPS guidance from greater than $7.25 to $1.75.

At the same time, CEO Sarah London laid out a credible plan for quickly righting the ship. Just like Buffett is betting that UNH will do so, I’m also betting that CNC will as well. And the upside here is likely 2-3x that in UNH.

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