Reporting Season Wrap: the Healthcare sector
The stocks with high hopes built into valuations disappointed during earnings season however those that had been weak showed improvement – some mean reversion starting to play out in Healthcare. Key points:
- Highly rated healthcare stocks Resmed (ASX:RMD), Cochlear (ASX:COH) and to a lesser degree CSL had a tough reporting period – expectations were high and all three failed to deliver to varying degrees,
- Hospital operators appear to have bottomed , and the private equity tilt at Healthscope (ASX:HSO) was well timed(from a P/E perspective). Ramsay Healthcare (ASX:RHC) talked more favourably about overseas operations and rallied
- Expect others in the sector to attract takeover interest, Healius (ASX:HLS) has attracted one bid, perhaps more to come while at the smaller end of the spectrum, Capitol Health (ASX:CAJ) missed earnings and dropped sharply. Their assets / balance sheet remain sound, a takeover target potentially
