Is Oscar Health a Buy?
Oscar Health's (NYSE: OSCR) initial public offering has proven to be a major flop despite having a top-rated health insurance business. Over the past six weeks, its shares are down 41.5% from their initial price of $39 apiece. With such a steep sell-off, many investors might be wondering if now is a good time to buy the dip.
Health insurance is a hypercompetitive industry. To acquire customers, Oscar Health is reinvesting a lot of its cash flows into growth, as well as reinsurance so the company could not be forced into bankruptcy if unforeseeable events led to a sudden rise in large medical claims. Its way of doing business has put off risk-averse investors. Luckily, it does have a very promising business model, one that can likely enrich those who understand it.
Image source: Getty Images.
Source Fool.com
