Berkshire Hathaway's $1.6 billion stake in UnitedHealth Group is helping to lift the Dow Jones Industrial Average to a new record as investors pile into healthcare sector funds.

UNH stock soared after Warren Buffett’s Berkshire Hathaway revealed it bought shares of the healthcare company. Nonetheless, UnitedHealth faces a long list of unresolved issues.

Warren Buffett's modus operandi is to wait for price dislocations to present themselves. In a historically pricey stock market, locating value has been virtually impossible. Yet, with UnitedHealth Group stock losing more than half its value since the midpoint of April, a rare price dislocation has emerged.

The investment comes as UnitedHealth faces soaring medical costs, federal investigations, the fallout of the killing of a top executive and a cyberattack last year.

Buffett owned UnitedHealth shares before selling his stake in 2010, though his Berkshire Hathaway recently acquired shares.