3 reasons I think Ramsay Health Care Limited shares are a buy

Here's why I think the Ramsay Health Care Limited (ASX:RHC) share price has significant upside potential in the long-term…

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When it comes to long-term buy and hold investing, I believe the healthcare sector is one of the best places to start to look for ideas.

Whilst there are a number of great options for investors in the sector, one name arguably towers above the rest. That company is Ramsay Health Care Limited (ASX: RHC).

Here are three reasons why I think the Ramsay Health Care share price could have significant upside potential in the long-term:

Global exposure.

Whilst rivals Healthscope Ltd (ASX: HSO) and Primary Health Care Limited (ASX: PRY) are primarily focused on the Australian market, Ramsay has a diverse range of operations that gives it exposure to the global healthcare market. I believe this puts the company in a strong position to profit from increased demand for healthcare services globally due to ageing populations across the world.

Value.

Although some investors may think that 30x trailing earnings is expensive, I believe it is great value for a company that has the potential to grow its bottom line at an above-average rate for at least the next decade. Furthermore, asides from its strong growth potential, I believe the company deserves to trade at a premium due to the quality of its business, management team, and operating assets.

China.

I believe Ramsay could further boost its earnings growth through an expansion into the lucrative China market. The company has had its eyes on the market previously, but pulled out of a joint venture when it failed to satisfy its high standards. I don't for a second believe this is the end of the story, though. After all, the company has alluded to the chronic disease opportunity in the country numerous times in the past. And with an estimated 83 million diabetics and a wealthy and ageing population, China seems like a logical next step for Ramsay if it can navigate through its strict regulations.

Motley Fool contributor James Mickleboro 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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