MENU

Are Ramsay Health Care Limited shares a buy?

Last week the Ramsay Health Care Limited (ASX: RHC) share price had one of its best weeks in months as investors returned to the private hospital operator following the government’s plan to put an end to declining private health insurance participation rates.

Things haven’t started quite as positively this week, though.

In late afternoon trade Ramsay’s shares are down almost 1% to $65.33 despite the market climbing higher today.

Why have its shares missed out on today’s move higher?

This morning Credit Suisse released a research note which downplayed any positive impact from the government’s private health insurance reforms.

While the broker acknowledges that the benefits will not be known for years, it isn’t holding its breath.

Its analysts appear to believe that affordability issues will not be solved through this latest initiative and the decline in participation rates will continue.

In light of this, the investment bank has retained its neutral rating and $71.60 price target on Ramsay’s shares.

Should you invest?

While I do agree with Credit Suisse on the impact, or lack thereof, of the government’s plans on the industry, I don’t agree with the rating.

I think that Ramsay is great value at the current share price and would class it as a buy ahead of industry rivals Healthscope Ltd (ASX: HSO) and Primary Health Care Limited (ASX: PRY).

While declines in private health insurance participation rates are a concern, I believe the company is more than capable of growing its earnings at an above-average rate over the next few years regardless of this.

This is thanks to the tailwinds of Australia’s ageing population and its ability to fuel growth through acquisitions and expansions.

As well as Ramsay, I think these growth shares are in the buy zone today.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.