The healthcare sector has traditionally been a safe haven for investors, providing consistent returns. And, with ongoing medical advancements and rising demand for healthcare services, the industry is expected to continue growing. However, we believe investors should avoid healthcare stocks Oak Street Health (OSH) and Bright Health Group (BHG). Analysts have recently downgraded them because of their poor fundamentals and weak growth prospects. So, read on to learn more.The healthcare industry has seen unprecedented capital inflows and investor interest over the past year, as evidenced by the Health Care Select Sector SPDR ETF’s (XLV) 20.9% returns over this period. In addition, the emergence of a new coronavirus variant and the growing demand for the diagnosis and treatment of other serious diseases are incentivizing companies to create integrated and comprehensive medical equipment, virtual consultations, and therapies.
The sector has enormous potential to grow next year thanks to technological advancements and the growing need for improved healthcare products and facilities from an aging population. The global healthcare market is expected to reach $11.9 trillion by 2022.
However, not all companies have been able to capitalize on the industry’s favorable growth prospects. Morgan Stanley (NYSE:MS) recently downgraded Oak Street Health Inc. (OSH) and Bright Health Group Inc. (BHG) because of their poor fundamentals and their inability to outperform their peers. So, these stocks are best avoided now.