Is it time to buy Ansell Limited shares?

The last few years haven’t been the best for Ansell Limited (ASX: ANN) shareholders.

Back in March 2015 the supplier of health and safety solutions with customers in 100 countries saw its shares trade for around $27.77, but they have since shed more than 10 per cent.

Ansell’s shares are now trading for about $24.05.

But some believe the future is looking brighter for Ansell shareholders.

For financial year (FY) 2017 Ansell recorded sales of about US$1.6 billion, up 2 per cent on the previous year.

However, the company’s profit for FY 2017 dropped to US$148 million, down from a profit of about US$159 million for FY 2016.

In FY 2017 Ansell also reported EBIT of about US$218 million, down 7.5 per cent from the US$237 million the company reported the prior year.

The company attributed a number of factors to the decline but seemed to place an emphasis on acquisition costs.

In January last year Ansell announced it has acquired Nitritex Limited, “a fast-growing UK-based, manufacturer of premium cleanroom and healthcare Life Sciences consumables”, for a total consideration of £57 million including £12 million of cash.

Ansell stated the transaction was expected to be 2 cents EPS accretive in FY 18.

Last year, Ansell sold its Sexual Wellness business to Humanwell Healthcare Group Co Ltd. and CITIC Capital China Partners III for US$600 million, with the gains of the sale to be booked in FY 2018’s account.

Ansell’s Sexual Wellness business comprised about 14 per cent of the company’s total sales in FY 2017.

The company also sold its Brazilian condom business, Fabrica de Artefatos de Latex Blowtex Ltda, which Ansell bought in 2007.

And it seems some think Ansell’s strategy will pay off.

Broker Ord Minnett upgraded Ansell’s shares to an ‘accumulate’ rating with an increased price target of $25.50 in October last year.

The company’s share price has posted gains since then, although it still remains short of Ord Minnet’s target.

While it’s likely things will turnaround for Ansell, I would be inclined to wait for the company’s half year results, due to be released next month, before investing in the company.

If you’re looking for exposure to the healthcare sector, companies such as CSL Limited (ASX: CSL) and Nanosonics Ltd. (ASX: NAN) would be worth considering before jumping on Ansell.

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