Health Care Stocks, News & Tips on the ASX
The Australian Health Care sector represents some of the country’s most successful companies, with fields ranging from pharmaceuticals, biotech, medical practices, pathology operators, and medical devices.
Many health care companies on the Australian Stock Exchange are leaders in their fields. It includes a whole host of dominating blue chip companies such as Cochlear, CSL, and Resmed.
On the small cap end of the market, you’ll find relatively new companies. They carry significantly more risk since there are inherent risks associated with researching, developing, and commercialising their product or service.
If you’re looking for more information, insider tips, professional analyses on up-to-date news on health care stocks, browse below for our Australian Stock Report resources.
Share to buy: Nanosonics (NAN)
December quarter sales were up 41% on the prior quarter, as North American direct sales gained momentum.
The company's move into the US market seems to be paying off, with gross margins improving significantly.
The next driver of share price could be publication of decontamination guidelines in the UK and Scotland favourable to Nanosonic products.
Technically, the stock remains strong and has broken out to fresh all-time highs recently on rising volumes.
Share to buy – Ramsay Healthcare (RHC)
- Market cap: $12.01 Billion
- Recent share price: $59.9
- Cash/debt: $315.86 million/$3.17B
- Trailing P/E: 32.64
Ramsay Healthcare is the largest private hospital operator in Australia and one of the top five hospital companies in the world. It has a presence in the UK, France, Indonesia and Malaysia. In Nov 2015, they inked a joint venture agreement with one of China's leading medical universities to build a number of new private hospitals in China's Pearl River Delta thus expanding its reach further.
RHC has a strong competitive advantage, which it has leveraged to grow its business. Key features include;
- Guaranteed demand given the growing ageing populations on a global scale
- Pricing power over its customers, insurers and governments, which often have no alternative but to use Ramsay’s services.
- Buying and building hospitals is very expensive and this is a major deterrent to other companies looking to enter the market.
- Ramsay has also proven to be very astute at building new beds at just the right pace to grow earnings without increasing supply beyond demand.
- Ramsay delivered solid growth in FY15 with revenues, core earnings per share and full year dividends increasing by 49.8%, 20% and 18.8% respectively.
- Management has provided guidance of 12-14% earnings per share growth in FY16 barring any unforeseen circumstances.
Share to buy – NIB Holdings Limited (NHF)
- Market cap: $1.48 Billion
- Recent share price: $3.38
- Cash/debt: $58.81 million/$63.89Million
- Trailing P/E: 19.54
NIB health funds is one of Australia’s largest health insurers, providing health and medical cover to more than 1.1 million Australian and New Zealand residents
Private Health insurers are a segment of the market worth watching over the coming 12 months.
Both Medibank Private and NIB have become increasingly vocal about the need to improve efficiencies in the healthcare system and to put a lid on the spiralling cost of care.
With federal reviews into private health insurance and the Medicare Benefits Schedule, among other parts of the health system, there could be significant changes in fortune for the insurers who pay medical bills.
Throughout 2015, NIB shares have been volatile after rising to nearly $3.90 in March before falling to a low of $3 in October.
However, consistent profit and dividend growth has been a regular feature from NIB in recent years helping the company’s share price lift 10% for FY 15/16.
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