Unpacking Oscar Health's Q3 Drop: A Fund Manager's Perspective
Understanding the Longleaf Partners' Small-Cap Fund Q3 2025 Report
Longleaf Partners, under the guidance of Southeastern Asset Management, recently unveiled its “Small-Cap Fund” investor letter for the third quarter of 2025. During this period, the fund achieved a return of 2.03%. This figure stands in contrast to the broader market performances, with the Russell 3000 index seeing an 8.18% increase and the Russell 2000 index climbing by 12.39%. The letter offers valuable insights into the fund's investment strategies and its top holdings for the year.
Oscar Health's Market Dynamics and Recent Valuation
A key focus of the Longleaf Partners Small-Cap Fund’s Q3 2025 letter was Oscar Health, Inc. (NYSE:OSCR), a prominent healthcare technology company based in the United States. In the month leading up to the report, Oscar Health's stock experienced a 2.97% decline. Over the preceding 52 weeks, its shares saw a more significant drop of 7.45%. By December 1, 2025, Oscar Health, Inc. (NYSE:OSCR) concluded trading at $16.65 per share, valuing the company at approximately $4.794 billion in market capitalization.
The Reversal of Fortune: Oscar Health's Q3 Performance Explained
The Longleaf Partners Small-Cap Fund’s Q3 2025 letter detailed Oscar Health, Inc. (NYSE:OSCR)’s performance, noting a significant shift. What was once a positive contributor to the fund in the previous quarter became a detractor in the third quarter. The fund had previously capitalized on positive market sentiment, reducing its holdings when the stock price exceeded $20 per share. July proved to be a particularly challenging month for Oscar Health and the broader healthcare insurance sector, primarily due to higher-than-anticipated claims losses in the first half of the year. Despite the unique market conditions, Oscar Health was not immune to these challenges, which negatively impacted its valuation. As the stock later showed signs of recovery within the quarter, Longleaf Partners opted to divest its remaining position, as the perceived gap between the stock's price and its intrinsic value had narrowed. This strategic exit concluded what was, overall, a successful investment for the fund, with gratitude extended to the company's leadership for navigating a turbulent industry landscape.
Hedge Fund Interest and Financial Overview of Oscar Health
Contrary to some expectations, Oscar Health, Inc. (NYSE:OSCR) does not feature among the top 30 most frequently held stocks by hedge funds. Data indicates that 40 hedge fund portfolios included Oscar Health, Inc. (NYSE:OSCR) at the close of the third quarter, a slight decrease from 43 in the preceding quarter. Financially, Oscar Health, Inc. (NYSE:OSCR) reported revenues of roughly $3 billion in Q3 2025, marking a substantial 23% year-over-year growth. While Oscar Health, Inc. (NYSE:OSCR) is recognized for its investment potential, the analysis suggests that certain artificial intelligence stocks may offer more compelling upside opportunities with reduced risk. For those seeking an undervalued AI stock poised to benefit from current economic trends and tariffs, further specialized reports are recommended.