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Sonic Healthcare Limited, Sydney Airport Holdings Ltd and Crown Resorts Ltd: Buy, Hold or Sell?

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”  – This is one of Warren Buffett’s most well known investing quotes and seems particularly appropriate at the moment considering the level of volatility and fear gripping the markets around the world.

This advice from Buffett doesn’t advocate investors buy every share in sight just because they look cheap after a sell-off, but rather to take the opportunity to buy high-quality shares that have been sold down with the rest of the market for no reason other than fear and nervousness.

With that in mind, should investors buy, hold or sell the following three high quality, blue chip ASX shares?

HOLD – Sydney Airport Holdings Ltd (ASX: SYD)

Sydney Airport is one of the premier infrastructure stocks on the ASX and is particularly well supported during times of volatility due to its defensive qualities.

Investors benefit from a stable and predictable dividend payout that has increased consistently over the past five years. At the current share price, investors can expect to receive an unfranked dividend yield of at least 4.2%. While this yield is lower than other listed infrastructure companies, it is firmly established thanks to Sydney Airport’s monopoly in the Sydney market and consistent passenger growth moving through the airport.

Following a strong rise in the share price in 2015, Sydney Airport’s current valuation does not leave enough upside for new investors, in my opinion. For that reason, I would wait for the share price to fall below $5.50 before being a buyer. With that said, investors who hold Sydney Airport should continue to hold the stock as it still offers a reasonable dividend yield and protection during volatile markets.

HOLD – Sonic Healthcare Limited (ASX: SHL)

Following the government’s proposal to strip $600 million in funding from pathology and diagnostic imaging providers, the share price of Sonic Healthcare was slammed by more than 12%. Since then, the share price has stabilised, and in fact, has outperformed the broader market by more than 6.8% since the start of 2016.

Investors may have been too quick to penalise the stock considering the potential impact of the proposal, according to Sonic Healthcare, would decrease pathology and radiology revenues by 3.5% and 2.7% respectively.

While this would be disappointing and a drag on earnings if implemented, Sonic Healthcare’s geographical diversity and large scale operations means it has other avenues available to it where it can offset some of these losses. Investors should also remember these measures are yet to be passed through parliament and if the government is unsuccessful in doing so, then the impact to Sonic would be negligible.

As there is still uncertainty surrounding the sector and the Medicare Benefits review is yet to be completed, I believe it is still too early to buy Sonic shares. Instead, investors should keep a close eye on any new developments and wait for any further weakness in the share price before buying.

BUY – Crown Resorts Ltd (ASX: CWN)

Despite speculation that James Packer may look to take Crown Resorts private, the share price has struggled to maintain any momentum over the last month and the shares have been sold down with the rest of the market.

I believe this could be a good buying opportunity for investors, not because I believe the company will be in the hands of a private entity over the next year, but because the long-term outlook for Crown Resorts looks increasingly positive.

The company’s assets in Australia should benefit from more tourist visitors thanks to the lower Australian dollar and lower oil prices should also provide more discretionary spending dollars for punters. The downturn in Macau appears to have bottomed and Crown Resorts has a robust pipeline of new casinos and resorts that are set to open over the next few years.

Investors should keep in mind, however, that issues in mainland China may spill over into gaming markets and this could potentially impact sentiment in the short term. Despite this, I still think Crown Resorts is a good long-term buy and will provide investors with a growing source of defensive dividends.

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Motley Fool contributor Christopher Georges has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. 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.