Morning Report Thursday 5 March 2015
Three Healthcare stocks that are interesting at current levels
The market is taking a breather after the recent dramas of the RBA failing to cut rates from the current 2.25%. I believe the pause will last around 2 weeks, before the press again gets excited about a potential rate cut on Tuesday April 7th. As readers know, I am looking to move away from a yield dominated portfolio over coming weeks/months, to a growth based bias. For me, there remains far less risk around the growth in the healthcare space than the resource sector, hence today’s note as I explore future opportunities.
Healthcare stocks remain a clear growth area as the population ages rapidly. Everybody wants exposure to this sector, but the question remains at what price? The Chinese economic growth may be slowing to the detriment of resource based countries like Australia and Russia, but their middle class is growing and that means better standards of living, including health. The largest issue with healthcare stocks is that they are already priced for significant growth, leading me to use technical analysis to identify good risk/reward entry levels:
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