5 Healthcare Stocks to Buy According to Tiger Cub Chase Coleman

3. Bright Health Group, Inc. (NYSE:BHG)

Tiger Global Management’s Stake Value: $96,678,000

Percentage of Tiger Global Management’s 13F Portfolio: 0.18%

Number of Hedge Fund Holders: 14

Bright Health Group, Inc. (NYSE:BHG), a Minnesota-based health insurance company, makes up 0.18% of Tiger Global Management’s Q3 portfolio, with the firm holding a $96.6 million stake in Bright Health Group, Inc. (NYSE:BHG). 

In the third quarter of 2021, 14 hedge funds tracked by Insider Monkey were bullish on Bright Health Group, Inc. (NYSE:BHG), with total stakes valued at $529.3 million. This is compared to 23 funds in the prior quarter, holding stakes worth $1.28 billion in Bright Health Group, Inc. (NYSE:BHG). 

On November 11, Bright Health Group, Inc. (NYSE:BHG) announced its Q3 results. The company posted a loss per share of $0.46, missing estimates by $0.32. The $1.08 billion revenue exceeded estimates by $9.25 million.

Morgan Stanley analyst Ricky Goldwasser on December 17 downgraded Bright Health Group, Inc. (NYSE:BHG) to Underweight from Equal Weight with a price target of $4, down from $5. The analyst sees the most difficult road ahead for Bright Health Group, Inc. (NYSE:BHG) in the “healthcare disruptor” IPO class, citing the company’s elevated operating losses and unsteady performance. 

Stepstone Group is the biggest Bright Health Group, Inc. (NYSE:BHG) stakeholder from the third quarter, holding 44.65 million shares worth $364.35 million.

Here is what Nomadic Value Partners  has to say about Bright Health Group, Inc. (NYSE:BHG) in its Q3 2021 investor letter:

“In the first week of August, we made a farm team investment in Bright Health Group (BHG), a health insurer with a similar payer/provider integration strategy as United Health. On September 30th we upsized our position to a 5% weighting. Our averaged cost basis of $8.16 per share creates the company at a valuation slightly over 1x 2021’s expected sales. This valuation may be appropriate for a low growth, old world health insurer, but it is too low in my view after adjusting for the company’s position in the market, various lines of business, and its expected sales growth over the next few years.

To understand why BHG trades at a low valuation today, let’s look at the history and current state of the core market it competes in…” (Click here to see the full text)