Longleaf Partners, managed by Southeastern Asset Management, released its “Small-Cap Fund” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund delivered -4.24% in the second quarter compared to a 3.22% return for the Russell 3000 Index and -3.28% for the Russell 2000 Index. It was a difficult quarter for small-cap stocks. Since inception, the fund’s goal has been to provide long-term, double-digit absolute returns. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Longleaf Partners Small-Cap Fund highlighted stocks like Oscar Health, Inc. (NYSE:OSCR) in the second quarter 2024 investor letter. Oscar Health, Inc. (NYSE:OSCR) is a health insurance company. The one-month return of Oscar Health, Inc. (NYSE:OSCR) was 1.87%, and its shares gained 135.00% of their value over the last 52 weeks. On July 30, 2024, Oscar Health, Inc. (NYSE:OSCR) stock closed at $17.39 per share with a market capitalization of $4.009 billion.
Longleaf Partners Small-Cap Fund stated the following regarding Oscar Health, Inc. (NYSE:OSCR) in its Q2 2024 investor letter:
“Oscar Health, Inc. (NYSE:OSCR) – Health insurance and software platform Oscar was the top contributor for the quarter. The stock experienced strong performance early in the quarter but gave back some gains later. In May, the company reported strong 1Q results with revenues up over 40% with a substantial portion of this growth dropping to the bottom line, leading to improved free cash flow (FCF). Oscar continues to gain share in the Affordable Care Act (ACA) market due to its superior customer experience and technology. In early June, the company held an investor day outlining growth plans within and outside of (e.g. small employer plans) the ACA market in a variety of environments, projecting over $2/share of pre-tax earnings power by the end of its current three-year plan. However, at the end of the quarter, the Presidential debate negatively impacted the stock price. The market’s perception is that a Republican victory in November could pressure the ACA market. Despite this, the ACA’s strong growth in many red and purple states makes aggressive cutbacks unlikely due to potential swing-state backlash. However, we are not banking on an aggressive scenario where the status quo remains in place and acknowledge there could be short-term drama. Despite strong stock price performance this year, value per share growth has been even stronger, so Oscar remains under a sixty-cent dollar on our conservative appraisal.”
A close up of a patient and a healthcare professional engaging in conversation, showing the company’s commitment to patient care.
Oscar Health, Inc. (NYSE:OSCR) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Oscar Health, Inc. (NYSE:OSCR) at the end of the first quarter which was 31 in the previous quarter. In the first quarter, Oscar Health, Inc. (NYSE:OSCR) reported $2.1 billion in revenues up 46% year-over-year. While we acknowledge the potential of Oscar Health, Inc. (NYSE: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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Oscar Health, Inc. (NYSE:OSCR) and shared the list of best healthcare stocks to buy under $20. In its Q4 2023 investor letter, Longleaf Partners Small-Cap Fund highlighted a 270%+ appreciation to its Oscar Health, Inc. (NYSE:OSCR) holding in 2023. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
