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Healthcare Companies Stays Strong

Stuart Lucy

Stuart Lucy is an Investment Specialist at the Australian Stock Report, and has gained exposure to funds management and investment banking throughout his career. He draws on this experience to provide macroeconomic commentary and actionable investment insights to clients. Stuart is responsible for writing reports, is involved in delivering Macrovue webinars and provides general advice to our members on portfolio construction. Stuart currently holds RG146 General and Securities qualifications.

The ASX continues to tumble down the bear market, after the index fell more than 6% at the open, before rising at the time of writing. COVID-19 continues to spread fear amongst the masses with the ‘Fear & Greed’ index from CNN Business suggesting everyone is extremely fearful. Panic buying of toilet papers and canned foods are examples of what the general public is doing amidst the coronavirus pandemic. While most companies are in the sea of red, a few healthcare companies have rallied during the pressure of the large sell-off in today’s session.

Cochlear (Up 14%)

Cochlear (ASX: COH) is an Australian company that designs and produces Cochlear implants that help with hearing loss. Cochlear is the only provider of hearing implants globally to have complied with the incoming C186 standard. This is a standout competitive advantage since they are in a position of market dominance compared to their competitors. The company continues to improve their products with the Nucleus 7 Sound Processor, arguably the most advanced system of its type in the industry. Revenue from the Nucleus 7 was the main driver of the company’s FY19 earnings beat. While this is not currently fully appreciated due to the coronavirus, the company will strive once the pandemic resides. 

CSL (Up 5%)

CSL (ASX: CSL) has a strong influenza business that provides a continuous revenue stream, given that the virus mutates and requires new flu vaccines each year. The firm’s competitive advantage is having a world-leading research team that can develop new vaccines, get them to market and patent them faster than competitors. This enables the company to get more sales, which produces more research funding and enables the company to continually attract top talent.

The company has maintained its growth record by continually investing in new technology and staying at the forefront of medical innovation. CSL has recently made heavy investments in developing gene therapies, which are widely believed to drive the next wave of medical advancement.

 


Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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