Although the Ramsay Health Care Limited (ASX: RHC) share price is up close to 7% year-to-date, I don't believe for a second that it is too late to invest.
In fact, I think now would be a great time to make a buy and hold investment in the private hospital operator. Here's why:
Great value.
Although its shares are higher year-to-date, at $72.98 they are down over 13% from the 52-week high of $84.08 they reached in October.
Furthermore, with its shares changing hands at 29x annualised earnings, I think it is great value for money considering its growth profile.
Ramsay has averaged earnings growth of 16.8% per annum for the last decade and shows no signs of slowing in the near future.
Especially with increased chronic disease burden and ageing populations around the world expected to lead to a significant increase in demand for healthcare services over the next couple of decades.
Expansion opportunity.
As well as having a robust balance sheet that allows for expansion through brownfield developments, management has advised that it has the financial flexibility to make acquisitions to boost growth when suitable opportunities arise.
One market which I expect to see Ramsay expand into over the next decade is the China market.
Management has spoken about the chronic disease opportunity in the country numerous times in the past and it's no surprise why.
With an estimated 83 million diabetics and a wealthy and ageing population, I feel China would be a natural fit for Ramsay if it can navigate through strict regulations.
Should you invest?
Overall, I believe now is a great time to make a buy and hold investment in Ramsay. Its relatively cheap price and strong long-term growth prospects make it my number one pick in the healthcare sector.
In light of this, I would choose it ahead of rivals Healthscope Ltd (ASX: HSO) and Primary Health Care Limited (ASX: PRY).
