Disruptive Health Stocks Rebounding vs. S&P 500
Every week I’ll provide updates on the latest trends in disruptive healthcare companies. Follow along to stay up to date!
Underperformance Last 12 Months
Over the last 12 months, the Disruptive Healthcare index, has traded down 2.2%. Over the same time, the S&P 500 has traded up 20.1%. But, it’s not that simple. In fact, in the last couple of months the peers have outperformed the broader stock market by quite a bit.
As of July 31st, the Disruptive Healthcare peer index was up 23.0% year to date during 2023 while the S&P 500 was up 15.2% on the year. Since that date, the healthcare peers have traded down 25.2% while the S&P 500 continued to rise another 4.9%.
Significant Improvement Over Last 2 Months
However, if we zoom in on the low point for the peer index, we see that the low trade was on 11/9/2023 when the peer index was down 21.6% year to date while the S&P 500 was up 1.1% year to date. From that date until now, the peers have outperformed the S&P 500 by quite a bit (up 27.6% versus 10.0%).
It appears that Disruptive Healthcare peers’ under performance versus the S&P500 may have been a bit overdone in 2023 and now the peers are catching up to the broader market.
Stock Price Performance Over Time
So what?
As the sector continues to outperform it will drive capital into the space. First this will become evident in the stock price performance of the public companies, and in the amount of capital flowing into the sector in the broader capital markets. Then, as these stock prices stabilize and yield is harder to find in the public companies, we will see capital flows increase into private market companies in the space as investors seek better yielding opportunities. How do I know capital is flowing into the space? Check out this graph from Goldman Sachs showing capital flows by sector so far this year. Healthcare is number 1 among S&P 500 sectors:
If you would like to receive weekly updates on this data and our outlook on the Disruptive Healthcare market, then please subscribe and share our work with a friend.
About What If Ventures — What If Ventures invests in mental health and digital health startups from seed stage to growth equity. To date, we have invested over $80mm into 67 healthcare startups since January 2020.
If you have questions about any of this analysis or want to collaborate with What If Ventures, please reach out via info@whatif.vc. We’d love to connect with entrepreneurs and investors in the space.
Helpful analysis! I'd love to see the P/E ratios for the companies in your Disruptive Healthcare Index presented alongside the market cap data. Many of them were historically so overvalued that they're finally back in the realm of normality.