Oscar Health (OSCR): A Billionaire's Small-Cap Bet with Big Growth Horizons

The healthcare sector has long been a battleground for innovation, and few companies exemplify this better than Oscar Health (NYSE: OSCR). With a market capitalization of $8.5 billion as of early 2025—a fraction of industry giants like UnitedHealth Group ($100+ billion)—Oscar remains a small-cap disruptor. This positioning has caught the eye of billionaire investor Mason Hawkins, who has steadily increased his stake in the company over the past three years. But what makes this digital health pioneer a compelling bet for long-term investors?

The Case for Oscar’s Growth Engine

Oscar Health’s rise is rooted in its tech-driven approach to healthcare. The company’s 68% year-over-year revenue growth to $2.4 billion in Q3 2024 underscores its ability to attract members seeking transparency and cost efficiency. Its improved medical loss ratio (MLR)—a critical metric for insurers—dropped to 84.6% in Q3 2024, signaling better cost management. This efficiency, paired with its +Oscar platform (which integrates AI-driven tools for personalized care), positions the firm to capitalize on a growing demand for consumer-centric healthcare solutions.

Mason Hawkins’ Strategic Stake

Hawkins, founder of Southeastern Asset Management, has long been a vocal advocate for Oscar. As of April 2025, his firm held 3.13 million shares of Oscar’s Class A stock, worth approximately $41.6 million, representing 1.25% of his portfolio. While this allocation is down slightly from 2.05% in Q3 2024 (when shares stood at 2 million), the increase in shares reflects unwavering confidence. The move aligns with Hawkins’ value-oriented philosophy, prioritizing companies with strong fundamentals and sustainable growth trajectories, even amid short-term volatility.

Note: The chart would show OSCR’s price fluctuating between $10–$22, highlighting its resilience despite sector-wide underperformance.

A Sector Outlier in a Challenging Market

While the healthcare sector faced a -0.53% YTD return as of early 2025, Oscar’s long-term story remains intact. Its focus on cost reduction and member engagement—evident in its 84.6% MLR—contrasts with traditional insurers’ struggles to balance costs. Furthermore, its tech-first model addresses a $3.7 trillion U.S. healthcare market ripe for disruption.

Conclusion: Why OSCR Could Be the Next Big Thing

Oscar Health’s $8.5 billion market cap places it in the small-cap tier, offering ample room for growth. With Hawkins’ 56.5% increase in shares since Q3 2024—despite a 38% dip in its stock price—investors signal belief in its long-term potential. Key catalysts include:
1. Revenue Momentum: The 68% YoY growth in Q3 2024 hints at scalability.
2. Operational Efficiency: A declining MLR suggests better margins ahead.
3. Tech Leadership: The +Oscar platform could drive differentiation in an increasingly digital market.

Hawkins’ 10-year holding streak and OSCR’s ranking as his 10th-largest long-term pick further validate its staying power. While the stock price has faced headwinds, the fundamentals—paired with the backing of a legendary investor—suggest Oscar Health is primed to outperform as healthcare evolves. For those willing to look beyond short-term noise, this small-cap gem could deliver outsized rewards.