Is Bright Health Group (BHG) A Great Long- Term Investment?

Nomadic Value Partners, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly net return of -6.5%% was recorded by the fund for the third quarter of 2021, versus the +0.6% total return for the S&P 500 Index. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Nomadic Value Partners, in its Q3 2021 investor letter, mentioned Bright Health Group, Inc. (NYSE: BHG) and discussed its stance on the firm. Bright Health Group, Inc. is a Minneapolis, Minnesota-based health insurance company with a $2.3 billion market capitalization. BHG delivered a -56.12% for the past month, and it closed at $3.73 per share on November 26. 2021.

Here is what Nomadic Value Partners  has to say about Bright Health Group, Inc.  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)

Source: Unsplash

Based on our calculations, Bright Health Group, Inc. (NYSE: BHG) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. BHG was in 14 hedge fund portfolios at the end of the third quarter of 2021, compared to 23 funds in the previous quarter. Bright Health Group, Inc. (NYSE: BHG) delivered a -62.21% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.