WAM Capital Limited (ASX: WAM) is one of the biggest listed investment companies (LICs) on the ASX. It's also one of the highest-performing LICs, reporting in its half-year report that it outperformed its benchmark for the six months to 31 December 2017.
Investment managers that have a long-term records of outperforming the market are worth monitoring in my opinion. If there's a share that the manager thinks could be a winner then it could be a winner for our portfolios as well.
Primary Health Care Limited (ASX: PRY) is one of Australia's largest healthcare companies with a market capitalisation close to $2 billion.
The business says it is committed to providing affordable, accessible and comprehensive healthcare for all Australians. It does this by offering pathology, medical centres, diagnostic imaging and IVF services, all at a low cost.
In FY17 the company didn't report a great set of financials with both underlying and reported net profit after tax (NPAT) decreasing. The one good part was that revenue grew a little.
I believe that the WAM Capital team are excited by Primary Health Care because the government has given clarity on funding.
There will be a progressive restoration of the Medicare indexation for GPs, specialists and some imaging modalities. This is expected to deliver around $3.5 million in annual revenue growth in FY19.
Primary is also likely to participate in 12 'Health Care Homes' trials and expects more positive short-term policy setting.
Foolish takeaway
Primary is currently trading at 19x FY18's estimated earnings with a grossed-up dividend yield of 4.3%. Primary is an interesting and defensive choice for WAM Capital, it's not the type of share I'd expect the team to choose, but they have a knack for picking shares at the right time.
