Selection for this week
Some Pros about the stock
Some Cons about the stock
Why the Quants like this stock
Criteria for choosing
The previous selections
The momentum stocks in the portfolio saw a flat performance since last Thursday. Some days saw big swings to the upside and some saw big swings to the downside. This portfolio is very volatile and not intended for short term trading. Medium to long term holds are appropriate. This, the 14th addition, is a health care stock. Continuing the trend of diversifying from the initial heavy concentration in IT stocks.
Add: OSCR (Oscar Health) – Healthcare Plans
What does the company do?
Oscar Health, Inc. is a U.S.-based healthcare technology company that provides health plans for individuals, families, employees, and small businesses. It also offers the +Oscar healthcare platform, Campaign Builder for provider and payer engagement, reinsurance products, brokerage services, and an enrollment platform that helps consumers and brokers shop for and enroll in medical and supplemental health plans. Founded in 2012 and headquartered in New York City, the company was formerly known as Mulberry Health Inc. and adopted the Oscar Health name in January 2021.
Why Some Investors Are Bullish
Excellent Q2 results — Revenue reached $4.88 billion, up 70% year over year, while net income jumped to $361.8 million, or $1.10 per diluted share, from a $228.4 million loss a year earlier. Adjusted EBITDA reached $415.3 million, compared with a $199.4 million loss in Q2 2025.
Major margin improvement — The medical loss ratio improved to 79.2% from 91.1%, while the SG&A ratio fell to 14.2% from 18.7%. However, part of the MLR improvement came from $164 million of favorable prior-period reserve development, so investors shouldn’t assume all of the improvement is purely structural.
Raised 2026 guidance — Oscar increased its full-year earnings-from-operations outlook to $500–$700 million, up from its previous $250–$450 million range, while maintaining revenue guidance of $18.7–$19.0 billion. It also lowered its projected full-year MLR range to 81.5%–82.5%.
Strong membership growth — Effectuated membership reached approximately 2.96 million at June 30, compared with about 2.03 million a year earlier, an increase of roughly 46%. Oscar’s growth is being driven primarily by its Individual and Small Group offerings, although the company no longer offers small-group plans effective December 2024.
Technology remains an important differentiator — Oscar continues to position its technology platform and AI capabilities as important tools for improving member engagement, healthcare navigation and operating efficiency. The company’s broader strategy is built around combining health insurance with a technology-driven consumer experience.
What Bears Are Worried About
The stock’s reaction shows expectations are high — Despite the strong Q2 numbers and higher guidance, the market reaction was negative. That suggests investors may be looking beyond the current quarter and focusing on whether Oscar can sustain its unusually strong margins and profitability.
Medical-cost and membership risks remain — Oscar’s results remain highly sensitive to medical costs, risk adjustment and membership trends. A deterioration in medical claims or changes in the ACA marketplace could put pressure on margins and earnings.
Some of the margin improvement may not be repeatable — The Q2 MLR benefited from $164 million of favorable prior-period reserve development, meaning investors should be cautious about extrapolating the quarter’s 79.2% MLR indefinitely. Oscar’s full-year guidance still assumes an MLR of 81.5%–82.5%, indicating management expects some normalization.
Why the Quants like this stock
Price / Sales (FWD) A+ 0.53
Revenue Growth (FWD) A+ 30.28%
Operating Cash Flow Growth (YoY) A+ 257.99%
ROE Growth (FWD) A+ 117.65%
Return on Common Equity (TTM) A+ 34.31%
3M Price Performance A+ 31.73%
FY1 Up Revisions (last 90 days) 7 Up and 0 Down
My View
I like Oscar’s improving profitability, rapid membership growth and technology-driven business model. But after such a dramatic improvement in earnings, I would want to see how much of the margin expansion is sustainable before getting too aggressive—the next few quarters should tell us whether Oscar has truly turned a corner or simply benefited from unusually favorable conditions.
Top Quant Stock of the Week Criteria
I am using a Quantitative research platform that provides a daily list of top-ranked stocks to buy or sell, based on a Comprehensive Quant Score. This Quant system uses computer algorithms to come up with its rankings. This score incorporates multiple factors, including valuation, growth, profitability, momentum, and EPS revisions.
I will be giving heavy weight to strong momentum and strong EPS revisions to make the weekly selection. Then, I will use my tested proprietary criteria to sort and then break any tie.
One stock will be selected each week. That would make 52 selections a year if I don’t miss any weeks because of internet problems.
The hold times for the stocks added will be 1 week to years. Although a 1 week hold would be rare, it could happen if the stocks Quant metrics took a big nose dive right after being selected. If an added stock maintains its good metrics, it will be kept in the portfolio until it doesn’t. No time limit. The Quant system will tell me when it is time to let it go. So the hold time is short, medium and long depending on the Quant system metrics.
All countries are included. ADR’s are ok but Pink Sheet stocks will not be allowed.
Certain Industries are excluded. My testing shows they do not perform well using Quantitative rankings. Two of the main ones are BioTechnology and Pharmacueticals.
The Remove Criteria: Once the stock no longer qualifies to be retained in the Portfolio, it will be removed. This could be because the companies metrics have deteriorated since selection, it is involved in a buyout or financial reporting problems.
Once a stock has been added to the Active list, it will not be added to. No doubling down.
The stocks considered are larger small cap, mid cap, large cap and Mega cap. They will be fairly easy to trade with opening or closing market orders as one of the ways to enter and exit positions.
It should be expected that about 50 stocks will be Active in the Portfolio in any given week, once it gets to the two year mark.
All stocks are added as equal weight. No rebalancing is to occur.
To be considered for addition, the stock has to be in the top group of Quant rankings for just several weeks. This is to allow newly upgraded stocks to qualify quickly. Hopefully, this will catch a couple of strong momentum stocks early in their move.
Once a stock is removed for cause, it can be added back in once it meets the add criteria. No waiting period is required.
There will be no limits on percentages of stocks in the Portfolio by Sector or Industry.
Previous Selections:
That health care stock looks very interesting. I will have to look into it more.
For a look at the live scorecard for Position Trader, see the google doc link below.
It has the Live performance numbers and some links back to more information about the three Quant stock Model Portfolio's.
https://live-scorecard.position-trader.com/
Other links:
https://positiontrader.blog/four-model-portfolios/#weekly
https://positiontrader.blog/four-model-portfolios/#30
https://positiontrader.blog/four-model-portfolios/#legacy
https://docs.google.com/document/d/1P2W1994O6SXvb4qfx2fqCFXnJSbPH3KJWQvqrGNqmCw/edit?tab=t.0