I think it is fair to say that 2017 has been a disappointing year for the Ramsay Health Care Limited (ASX: RHC) share price.
The private hospital operator's shares more often than not have vastly outperformed the market over the last decade.
However this year its shares are down 2% compared to a 5.5% gain by the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
Will things be better in 2018?
I think so. I feel that Ramsay has a great chance of outperforming the market in 2018 due to its solid growth prospects and current valuation.
At 29x trailing earnings I think Ramsay's shares are great value for investors willing to make a patient buy and hold investment.
While this is not cheap compared to the market average, I feel few shares on the market have such strong long-term growth potential as Ramsay.
Growth in healthcare is expected to continue to be underpinned by an ageing population, rising prevalence of chronic diseases, and improvements in medical technologies for at least the next couple of decades.
This organic growth alone should allow Ramsay to grow its bottom line at a solid rate for the foreseeable future. But thanks to its strong balance sheet I believe it has the ability to accelerate this growth inorganically through acquisitions and expansions.
One country which I expect to see Ramsay expand into in the future is China. Management has often spoken about the size of the opportunity there and I'm sure when the time is right it will make a move.
All in all, I think Ramsay is a great option for investors in 2018 and would suggest investors choose it ahead of rivals Healthscope Ltd (ASX: HSO) and Primary Health Care Limited (ASX: PRY).
