According to a report on AFR.com, newly installed healthcare analysts at stock broker CLSA Zara Lyons and David Stanton have initiated coverage of the following three high quality healthcare stocks with 'buy' recommendations.
1. Ansell (ASX: ANN) manufacturers a range of gloves and condoms for the industrial, medical, specialty and retail sectors globally. The firm has a market capitalisation of $2.5 billion and has seen its shares rally nearly 23% in the past 12 months, which is slightly more than the 21.7% rise in the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO). With leverage to a growing global economy – particularly manufacturing – Ansell's long-term outlook for earnings growth looks solid.
2. CSL (ASX: CSL) is a vertically integrated biotech company. The firm conducts research, development, manufacturing, marketing and distribution of its products with a focus on treatments derived from human blood plasma. With global operations and a market capitalisation of $33.4 billion, the firm is well positioned to continue to grow and expand both its product offer and customer reach. CSL's shares have surged 48% in the past year however Lyons and Stanton obviously see further upside potential.
3. ResMed (ASX: RMD) is a leading provider of medical equipment for treating, diagnosing and managing breathing issues, with a particular focus on obstructive sleep apnea (OSA). ResMed has a market capitalisation of $7.3 billion but despite its market leading status it still only has a relatively small share of the OSA market, which means there is still enormous growth potential. The shares are up over 33% since October last year however the size of the undiagnosed OSA market means ResMed is still on an exciting growth trajectory.
Foolish takeaway
Warren Buffett learnt decades ago that buying great companies at conservative prices is a winning strategy. Ansell, CSL and ResMed all have the attributes of great companies including quality management, long runways of future growth and certain barriers to entry which help keep competitors away.
