This episode breaks down how North Star analyzes healthcare companies. Everyone routinely experiences health care through dental, medical, or mental health care services, thus classifying this as an extremely relatable industry. However, healthcare stock valuations can be challenging for value investors. Such investors are likely to invest in out-of-favor, but well-capitalized yet under-earning businesses. To avoid value traps, it is crucial to study the various subindustries, differentiated business models, and positive or negative regulatory catalysts.