We recently published a list of the 7 Best Performing Long Term Stocks in 2024. In this article, we are going to take a look at where Oscar Health, Inc. (NYSE:OSCR) stands against the other best performing long term stocks in 2024.
After the latest 50 basis point rate cut by the Federal Reserve, the market has been performing well. All of the major market indices have been in the green since then and experts are taking it as a good sign.
We discussed the Fed’s rate cut in our article about the best day trading stocks. Here is an excerpt from the article:
“…the Federal Open Market Committee (FOMC) chose to lower its policy interest rate by 50 basis points, a move intended to ease monetary policy. Powell explained that this action reflects growing confidence that labor market strength can be maintained, while inflation continues to decrease toward the Fed’s target. Powell emphasized the Fed’s flexibility in its approach and noted that future rate changes will depend on incoming data and the evolving economic landscape.
When questioned about the likelihood of future rate cuts, Powell said that each decision would be data-driven and made on a meeting-by-meeting basis. The Summary of Economic Projections (SEP) suggests a federal funds rate of 4.4% by the end of the year, with further reductions expected in the years ahead, which points to expectations of lower inflation and slightly higher unemployment.”
Understanding the Current Stock Market Optimism
Lead writer for Markets Live at The Wall Street Journal, Gunjan Banerji also shares the market’s optimistic sentiment as she explained in an interview with CNBC on September 25. Banerji discussed the growing optimism in the stock market despite ongoing bullish sentiment for the past few years. She highlighted how the recent rate cut by the Federal Reserve boosted market confidence, with the VIX (volatility index) dropping to its lowest levels and other indicators like high-yield bonds and options showing continued belief in the rally.
Dominic Chu of CNBC expressed concerns about potential market overconfidence, given the calmness amid geopolitical risks, the upcoming U.S. presidential election, and consumer spending challenges. Banerji acknowledged these risks but emphasized that much of the market’s optimism is tied to the Fed’s actions, with people reassured by the larger-than-expected rate cut.
Finally, Banerji pointed out a broadening of the market rally beyond the tech sector and mentioned the strong performances in sectors like energy and materials, and record highs from companies like Caterpillar and McDonald’s, which indicates a healthier, more diverse market rally.
Our Methodology
For this article, we used stock screeners to identify nearly 60 mid to mega-cap stocks with year-to-date share price returns of over 100%. Next, we narrowed our list to 7 stocks with the highest average analyst price target upside, as of September 24. We also added the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds. The stocks are sorted in ascending order of their upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Oscar Health, Inc. (NYSE:OSCR) the Best Performing Long Term Stock in 2024?
Oscar Health, Inc. (NYSE:OSCR)
Average Analyst Price Target Upside: 28.97%
Stock Price Performance YTD: 138.57%
Number of Hedge Fund Holders: 40
Oscar Health, Inc. (NYSE:OSCR) is a New York-based health insurance company that focuses on individual and small-group markets. The company offers traditional health plans as well as +Oscar, a technology-driven platform designed to facilitate the transition to value-based care for both providers and payers. The approach positions it as a forward-thinking player in the industry, capable of addressing the evolving needs of healthcare.
The stock was covered by 6 analysts and has a consensus Buy rating. The average price target of $28.00 implies a 28.97% upside from the present levels, as of September 24. It is among our best performing long term stocks in 2024. The stock is up 138.57% year-to-date.
During Q2, the company served around 1.6 million members across the country. The second quarter marked a record period for the company, with total revenue reaching $2.2 billion, a substantial 46% increase compared to the same quarter last year.
The company mentioned that impressive growth was because of rising membership numbers and strategic rate increases. It has revised its full-year 2024 outlook and projects revenues between $9.0 billion and $9.1 billion, which is an increase of $700 million from previous estimates. Additionally, the company forecasts adjusted EBITDA to fall within the range of $160 million to $210 million.
In June, Oscar Health (NYSE:OSCR) laid out a clear vision for future growth. It is targeting a compound annual growth rate (CAGR) of at least 20% in revenue and a 5% operating margin by 2027. The company plans to significantly expand its insurance footprint to capitalize on existing and new market opportunities to advance its addressable Affordable Care Act (ACA) market. The ambition is supported by its focus on introducing innovative products tailored to the diverse needs of its member base.
The company’s membership growth has been remarkable, with a 63% increase year-over-year. Oscar Health (NYSE:OSCR) has effectively deepened its market presence, achieving growth in about 80% of the states it operates in.
Overall, OSCR ranks 4th on our list of the best performing long-term stocks in 2024. While we acknowledge the potential of OSCR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than OSCR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.