What Happened?
Shares of medical supply and logistics company Owens & Minor (NYSE: OMI) fell 3.5% in the afternoon session after the broader healthcare sector traded lower as industry heavyweight UnitedHealth Group reported disappointing second-quarter results and a weakened outlook for 2025. The negative sentiment was triggered when UnitedHealth, a giant in the health insurance space, posted second-quarter earnings of $4.08 per share, which fell short of analysts' expectations. The company also issued a cautious profit forecast, citing rising medical expenses. This news created a ripple effect across the industry, pulling down shares of other managed care and healthcare companies. Investors appeared to react to the potential for similar cost pressures and challenges to impact other firms in the sector, leading to a broad-based sell-off.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Owens & Minor? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Owens & Minor’s shares are extremely volatile and have had 43 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock dropped 3.2% on continued pressure from the previous week's announcement of potential new U.S. tariffs on Canada. The negative sentiment follows news from late last week that the U.S. administration was considering a significant 35% tariff on Canadian imports, sparking fears of a broader trade dispute. The healthcare sector is seen as particularly vulnerable to such tensions because of its deeply integrated supply chains with Canada for various medical devices and products. For a medical supply and logistics company like Owens & Minor, the prospect of new tariffs raises concerns about increased operational costs and potential disruptions. This uncertainty is weighing on investor sentiment, as a trade war could pressure profit margins for companies reliant on cross-border trade for their supplies and distribution networks. The stock's move reflects broader market anxiety about the economic impact of protectionist trade policies.
Owens & Minor is down 41.9% since the beginning of the year, and at $7.46 per share, it is trading 54.5% below its 52-week high of $16.42 from July 2024. Investors who bought $1,000 worth of Owens & Minor’s shares 5 years ago would now be looking at an investment worth $453.74.
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