Unfortunately for its shareholders the Ramsay Health Care Limited (ASX: RHC) share price has gone nowhere so far this year.
This is especially disappointing considering the S&P/ASX 200 Health Care (Index: ^AXHJ) (ASX: XHJ) is up a remarkable 17% year-to-date.
Is Ramsay in the buy zone?
I think it is. While market volatility may present even better buying opportunities in the future, I believe those that are prepared to make a long-term buy and hold investment will do very well with an investment at the current share price.
After all, with a sharp increase in ageing populations around the world, demand for healthcare services is expected to increase substantially over the next few decades.
According to a recent presentation, the global population aged 60 or above is expected to more than triple by 2050.
In my opinion there are few companies better positioned to meet this demand than Ramsay.
Its global network currently consists of 25,000 hospital beds across 233 hospitals, 1,150 operating theatres, 38 emergency departments, 15 healthcare and treatment facilities, and 200 pharmacies.
Impressively I expect these numbers to rise strongly over the next decade as the company takes advantage of brownfield and greenfield expansion opportunities.
Furthermore, I wouldn't be at all surprised to see the company expand into the massive China market in the future. Especially as management has pointed out the chronic disease opportunity in the country numerous times in the past.
With an estimated 83 million diabetics in the country and a wealthy and ageing population, it seems like a natural fit for Ramsay if it can navigate successfully through strict regulations.
So although its shares are changing hands at a reasonably expensive 27x annualised earnings, I believe they are worth every cent.
In light of this, I would invest in Ramsay ahead of its peers Healthscope Ltd (ASX: HSO) and Primary Health Care Limited (ASX: PRY) today.
