Does MM like Sonic Healthcare (SHL) into current weakness?
Hello, SHL.AU has reached multi year lows this week. Would you think it is a buy around these levels?
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Answer
Hi Libby,
We see no reason to step up and catch this falling knife, its fallen over 38% since December and its still making fresh 18-month lows this week, we would rather buy at a higher price after seeing a meaningful catalyst to turn the companies fortunes around.
The stock received a broker downgrade just over 12 months ago and its been friendless ever since as the world moves on from COVID, the stocks now back to exactly where its was at the start of the pandemic. Healius (HLS) has experienced a similar fate.
We would advocate watching the operational performance of Ramsay Healthcare (RHC) as a guide for when things are turning around for both SHL & HLS.
