With Primary Health M&A Heating Up, Keep an Eye on these Stocks

Feb 08, 2023
Doctor measuring blood pressure to a smiling woman as a part of a medical exam.

Investors may want to keep an eye on primary care stocks.

For one, the current U.S. healthcare system is fragmented, which “adversely impacts quality, cost, and outcomes. Eliminating waste from unnecessary, unsafe care is crucial for improving quality and reducing costs-and making the system financially sustainable,” says The American Journal of Managed Care (AJMC).  

Also, according to Canaccord Genuity analyst Richard Close, as quoted by Fierce Healthcare, “Studies have shown the value of primary care through lower healthcare spending and improved health outcomes. But there has been an underinvestment in primary care in the U.S. compared to other developed countries and there is a shortage of primary care providers.”  

Two, we’re just starting to see M&A in the sector. 

Today, for example, CVS said it would buy Oak Street Health for $10.6 billion.  

According to ABC News, “The acquisition comes just three months after a nearly $9-billion investment by rival Walgreens in VillageMD’s acquisition of the urgent and primary care chain Summit Health-CityMD. And that deal was announced two months after CVS said it would spend $8 billion to acquire home health care provider Signify Health.”

Three, with the primary care industry exploding in popularity, other stocks to keep an eye on include small cap stocks, like Cano Health (CANO), CareMax (CMAX), Bright Health Group (BHG), and Cutera (CUTR), for example.  Just be careful with these stocks if you decide to buy any.  They’re all small caps, which can be a bit more volatile.