Healthcare Stocks with Warning Signs: OPCH, ILMN, MRK

The healthcare industry has been performing well lately, with stocks returning 38.9% over the past six months, outperforming the S&P 500 by 20.9 percentage points.

However, not all healthcare companies are created equal, and some have warning signs that investors should be aware of.

One such company is Option Care Health (NASDAQ:OPCH), which has a nationwide network of infusion services but is expected to see slow demand over the next 12 months, with estimated sales growth of just 4.3%.

The company's free cash flow margin has been stuck in limbo for five years, and returns on capital have not budged, indicating that management may not be driving additional value creation.