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The Lifehealthcare Group Ltd share price is heading higher today

The Lifehealthcare Group Ltd (ASX: LHC) share price has surged 5 per cent to $2.30 today, despite the healthcare specialist releasing no news to the market.

As an importer of medical equipment such as prosthetic limbs and spinal implants from specialist U.S. manufacturers the company is a net beneficiary of a stronger Australian dollar, which may be supporting the share price today.

Share trading in the business has also seen relatively heavy volumes over the last week or so and this can produce exaggerated share price movements for less liquid stocks such as LifeHealthcare, especially if an institution is buying into the stock.

The company also recently announced a new distribution agreement with a key supplier of spinal and other medical devices, although probably the biggest factor deciding the stock’s direction over the short term will be any potential regulatory changes that impact pricing across the medical device supply business.

LifeHealthcare shares trade on just 10.5x forecast earnings with a full year FY 2016 yield expected to be in the region of 6.7%. That’s potentially cheap for a business that carries some debt, but still has the potential to grow at decent rates if management can deliver on the opportunity ahead of it.

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Motley Fool contributor Tom Richardson owns shares of LifeHealthcare Group Limited.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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