CSL Limited share price bounces even higher

CSL Limited (ASX: CSL) has seen its share price hit a new 52-week high of $140.46, with the share price now up nearly 40% so far this year.

Driving the share price higher was recent news that the company is going to acquire a majority stake (80%) in Chinese plasma fractionator Wuhan Zhong Yuan Rui De Biologicals Products (Ruide) for US$352 million. Ruide has a portfolio of domestic plasma products, a manufacturing facility and four plasma collection centres.

According to CSL, the transaction complements CSL’s leadership position in China as a supplier of albumin.

CSL’s share price may appear expensive, but when doesn’t it? We’ve often said the company is the highest quality business on the ASX, and paying up for quality when it comes to CSL is likely to pay off over the long term. The company is forecasting 18-20% growth in profit growth for the 2017 financial year.

Motley Fool contributor Sean O’Neill recently said he’d be happy to pay 30x earnings for CSL. We wouldn’t be surprised to see the share price over $200 within the next eighteen months.

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Motley Fool writer/analyst Mike King owns shares in CSL Limited. You can follow Mike on Twitter @TMFKinga

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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