Motley Fool Australia

2 healthcare shares to pounce on at a lower price

Credit: Brogan & Partners

With Australian shares looking so expensive that one fund manager reportedly sold all his investments and returned the money to investors, it’s no wonder some Australians are getting nervous about the share market.

Still, it never hurts to have a few companies in mind that you’d pounce on in the event of a market crash. Here are two I’d buy in a flash if they were cheaper:

CSL Limited (ASX: CSL)

CSL Limited produces life-saving blood products for customers with rare diseases worldwide. It generates oodles of cash from its sales, which it reinvests into research & development, acquiring new businesses, and buying back shares. CSL recently bought the Seqirus vaccine business, which is currently unprofitable but expected to become a significant contributor to earnings in the next couple of years.

The company also has several promising treatments in the later stages of development which, if successful, could generate new earnings streams for years into the future. The main drawback is price, but I would start to get pretty interested in CSL below $100.

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

Fisher & Paykel designs and manufactures oxygen masks, humidifiers, and other types of breathing equipment and consumables for use in hospitals. It’s rapidly expanded its operations over the past few years and has delivered stellar results for investors. Now, the company is increasingly migrating its manufacturing to Mexico, which is expected to reduce costs and improve profitability.

The company also has an active research & development team, and spends a similar percentage of revenue to CSL (10%) on its R&D every year. New products have been significant contributors to earnings growth so far, and there are more in the works. Again price is an issue, but I’d be quite interested in Fisher & Paykel around $8.

Where to invest $1,000 right now

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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. 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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