Health stocks
I have held Ramsay shares all through the good times and now wonder why I still have them. Is the a better use of my money - either in health stocks or a different sector?
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Answer
Hi Tony,
We took a hit on RHC in July and painful as it was the stock has now dropped a further ~15%. RHC keeps threatening to bounce and we’re sure it will at some stage but after its earnings missed expectations again in late August investors appear to be capitulating even if RHC’s guidance is for profit to grow in FY25 – we see no reason to buy RHC yet although value is slowly emerging below $40. We still think a takeover is likely in RHC at some stage, though the current issues with Healthscope, who are trying to renegotiate their pile of debt is not helping.
- Our preferred healthcare stocks at current levels are CSL and HLS (for a turnaround) while PME looks great if/when it experiences another pullback.
