Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi Guys, During an economic slow down or recession period, which Healthcare stocks do your prefer? I'm a long term CSL investor, but also have Pro Medicus in my portfolio, both have somewhat recovered from their lowest prices this year. Thanks Angela
Hi Angela,
A very logical question with a recession in 2023 feeling like a 50-50 punt, we are leaning towards any economic contraction being shallow although unfortunately this is one play which is largely in the central banks court. Generally healthcare stocks outperform during a recession because our health is one of the last things people cut back on however not all companies are equal and businesses with more debt / less cash flow are far more likely to struggle i.e. biotech start ups are probably best avoided.
Some of MM’s favourites have solid balance sheets and clear product advantages e.g. CSL Ltd (CSL), ResMed (RMD), Cochlear (COH) and Ansell (ANN) i.e. fairly mainstream and boring. Also we would add Ramsay Healthcare (RHC) to the mix which is trading well below KKR’s $88 bid price lobbed in just a few months ago which implies to us there’s plenty of value / defensive qualities in RHC around todays $70. In the US, this week we bought HCA Healthcare (HCA US) and at the smaller end of town we like Capitol Health (CAJ), which is a diagnostics/imaging business. At current prices and following the recent rally from both CSL & RMD which we own, our preference would be RHC at current prices.
Take a free trial.
No payment details required.
Forgot password? Request a One Time Password or reset your password
One Time Password
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
A link to create a new password will be sent to the email address you have registered to your account.
Hi, this is only available to members. Join today and access the latest views on the latest developments from a professional money manager.
Our Smart Phone App will give you access to much of our content and notifications. Download for free today.
