Oscar Health, Inc. (OSCR): Among Michael Burry Stocks with Huge Upside Potential
Michael Burry, founder and manager of Scion Asset Management, is best known for predicting and profiting from the housing bubble's collapse in the mid-2000s. His bold contrarian bet was famously chronicled in the book and film 'The Big Short.' Burry's investment strategy draws heavily from the rigorous market analysis and principles outlined in Benjamin Graham and David Dodd's 1934 book 'Security Analysis.' The book championed the merits of financial statement analysis, highlighting the importance of intrinsic value and structured investment principles.
That said, Burry has never shied away from putting his own distinct stamp on Wall Street's time-tested principles. By utilizing complex financial tools, such as derivative securities and short-selling, Burry has amassed a fortune, challenging conventional market wisdom. His 2001 Scion Value Fund letter provides a fascinating insight into his contrarian outlook, which prioritizes long-term value over short-term price fluctuations. Burry makes it clear that to achieve significant long-term returns, he is willing to tolerate short-term volatility. He stated:
'I will always choose the dollar bill carrying a wildly fluctuating discount rather than the dollar bill selling for a quite stable premium.'
He also has no qualms about making significant investments in a few stocks that he believes are undervalued, a tactic the investor employed to strengthen Scion's holdings at the end of 2024.
In the quarter that ended on December 31, 2024 just before DeepSeek's artificial intelligence breakthrough sparked a $1.3 trillion surge in Chinese tech stocks, Michael Burry offloaded some of his investments in the country's tech stocks. The moves came amid a period of high volatility for Chinese stocks, when investors appeared to be losing faith in Beijing following the implementation of a stimulus package in late September. The government's actions triggered a wild rally until early October, though momentum waned due to a property crisis, a poor economic outlook, and dissatisfaction with the scope of fiscal stimulus in the following months.
For this article, we examined Scion Asset Management's Q4 2024 13F filings to list down Michael Burry's stock picks with the highest upside potential. We ranked the companies in ascending order of their upside potential. These equities are also popular among elite hedge funds.
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 373.4% since May 2014, beating its benchmark by 218 percentage points ().
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 a health insurance company which makes use of a full-stack technology platform to offer and manage insurance. Its primary operations and services include health insurance plans, technology platform +Oscar, and member services. The company focuses on the health insurance sector through telemedicine, healthcare-focused technological interfaces, and transparent claims pricing systems.
On May 7, Oscar Health, Inc. (NYSE:OSCR) announced first-quarter revenue and earnings that surpassed analyst expectations. The company reported adjusted earnings per share of $0.92, exceeding the consensus estimate of $ 0.81. Revenue for the quarter was $3.05 billion, surpassing the forecast of $2.84 billion and representing a 42% year-over-year increase from the $2.14 billion in Q1 2024. As of March 31, the company had over 2 million members, up from 1.45 million the previous year.
Artificial Intelligence is another area of growth for the company. During Oscar Health's fourth-quarter results call, CEO Mark Bertolini stated that the company is rapidly deploying artificial intelligence in additional areas of its business. He stated that last year, the company implemented AI in 11 new use cases. Ten further use cases are being planned for the first quarter of 2025.
Longleaf Partners Small-Cap Fund stated the following regarding Oscar Health, Inc. (NYSE:OSCR) in its Q4 2024 investor letter:
'Oscar Health, Inc. (NYSE:OSCR) – Health insurance and software company Oscar was a top detractor for the quarter while remaining a top contributor for the year. The company delivered another strong quarter operationally, achieving over 60% year-over-year revenue and membership growth, while advancing toward its publicly stated goal of 5% operating income margins. Despite the operational progress, the Trump presidential win weighed on the stock price in the quarter due to added uncertainty around the future of the enhanced ACA subsidies set to expire at the end of 2025 and broader implications for the ACA itself. Oscar still has underappreciated non-earning assets in various regions at different stages of ramp-up, transitioning from investment mode in some areas to higher-margin operations in others. We view this as a long-term positive, highlighting the embedded long-term growth potential at Oscar. While election-related news contributed to stock volatility in the second half of the year, we capitalized on the volatility by strategically trimming and adding to our position. It was powerful to see both co-founder Josh Kushner and CEO Mark Bertolini (via his foundation) each purchase more than $10 million worth of stock in the wake of the election selloff.'
Overall, OSCR ranks 6th on our list of Michael Burry stocks with huge upside potential. While we acknowledge the potential for OSCR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than OSCR but trades at less than 5 times its earnings, check out our report about this .
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