Long

OSCR (Long) - Impressive growth, with low but improving margins

My last healthcare idea, which is also my most recent, has gone spectacularly wrong after the stock fell precipitously on news which I was not able to source despite my extensive efforts. So, what else to do then than to jump on another attractive healthcare idea -

Fundamentals

The underlying growth of OSCR can only be described as impressive, with the firm growing by more than 40% every quarter (y-o-y) ever since it has gone public back in 2021 (despite already reaching over 10b in annual sales) - I left the numbers in the chart for a reference
The reason why its valuation is so low (0.4 P/S) compared to its peers is mainly the razor-thin margins, with EBITDA margins hovering only around 2% - but this is coming from a negative territory and most importantly, continues improving.
The firm just reported another stellar earnings and from the public discourse, its insurance solutions seem to steaming through the market and gaining market share
The main risk, which is pretty significant if realized, is political, and tied to the ACA subsidies - for a great article you can read about it here
However, for someone who plans to hold for the next 3-6 months (like myself), this shouldn't be an issue

Technicals

As mentioned, the firm recently released stellar earnings which propelled the price >20% higher. After a little consolidation, the price seems to have held its ground and is now poised to go higher
The stock price also broke out from a base as depicted on the chart, though I have to admit, it does not have the degree of accumulation I would prefer but the overall setup still looks very attractive
Momentum indicators like Stochastic and MACD are all entering positive territory, meaning we are likely only entering the upside potential

Trade

I entered the trade right after the breakout as I had been eyeing the stock for some time. The next few days confirmed the breakout and the stock is now seemingly heading higher, providing another good entry point
The low of where the stock price now consolidated also represents a great stop loss point (marked by the red line on the graph)
No price targets as I am just looking to watch how the price action evolves over next weeks, but breaking the previous local high would be a good point for potentially adding

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jurajholik

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jurajholik

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