Morning Report Wednesday 22 April 2015
Thank you to those who attended last night’s Webinar and apologies if you had trouble logging in as our limits were exceeded due to an excess in demand. A recording is available here.
The Healthcare Sector Finally Underperforms the Market
Over the last 5 trading days, the ASX200 has fallen 1.25%, whereas the healthcare sector has lost 2.7%. Very different from the annual 45% gain, outstripping the meagre 7.2% gain from the ASX200. With an ageing population, it’s no surprise that the healthcare space is a clear “market darling” with a lofty average P/E ratio for the sector of 36, compared to the ASX200’s of 21. Like the market in general, I believe that healthcare is a growth sector, along with Telco and Financial Services, and subsequently it remains an area I am consistently considering for opportunity.Interestingly, most local investors are very exposed to the “big 4 banks” and are very happy with their 8.5% capital return plus fully franked dividends ~5%, but this compares very poorly with the Healthcare’s 45.4% capital return plus ~1.8 % part franked dividends. I believe that our banks are close to cyclical highs, but the healthcare sector overall will continue to grow. Below are 5 healthcare stocks that I monitor closely:
Show more...
