Why I think these 3 healthcare stocks look odds on winners

These leading healthcare stocks finished the week up last week and have stormed into this week’s trading on a similar footing.

Here’s why they’re the hottest healthcare stocks on the ASX right now.

Ramsay Healthcare Limited Fully Paid Ord. Shrs (ASX: RHC)

Shares in global hospital group Ramsay Healthcare Limited are showing signs of recovering from 52-week low territory after share prices plummeted to $61.74 on April 12 – not far off its 12-month low of $61.06.

Ramsay shares are back in the black today, up 0.3% to $62.90 at the time of writing as the company continues to plough ahead on its hospital expansion growth operations, as it bides time for a rumoured expansion into North America or China in coming years.

Ramsay’s share price has taken a beating lately as its UK and France segments have lagged behind expectations and rising interest rates out of the US have put a dampener on asset prices across many sectors.

Rising private health insurance premiums this month would also have hurt the private hospital operator, and if private health policyholder numbers net significant declines this could hit Ramsay right where it hurts.

But for now, Ramsay’s fundamentals look solid and with a grossed-up dividend yield of 3.1% it looks like a defensive share for the medium-term in the very least.

Ramsay has gained good market traction from its ability to meet the needs of Australia’s ageing population, but players like Healthscope Ltd (ASX: HSO) are hot on its heels and although Healthscope shares dropped today – down 0.5% to $1.98 – the company is asserting itself as a market-leader in the pathology space and is certainly one to watch.

Summerset Group Holdings Ltd (ASX: SNZ) may not be a hospital-sector competitor, but it’s doing well for itself in the closely-related retirement village and aged care facility market and should be on every defensive investors watchlist right now.

Sigma Healthcare Ltd (ASX: SIG)

Shares in pharmaceutical company Sigma Healthcare Ltd are on the up today – rising 0.2% to 72c per share at the time of writing.

Sigma is much smaller fry than the likes of Ramsay, but presents an opportunity for investors seeking to unearth the next CSL Limited (ASX: CSL).

While Sigma isn’t the next CSL, its pharmacy-led network looks primed for solid growth in the medium term and is only set to benefit from the growth of the likes of CSL and its infection control cousin Nanosonics Ltd (ASX: NAN).

Sigma shares may be starting to turn around from a share price downturn in the last 12-months, but the company will need to work hard to meet changing customer needs in the pharmaceutical space to book gains.

Sonic Healthcare Limited (ASX: SHL)

Shares in medical diagnostics company Sonic Healthcare Limited are up 0.4% to $23.15 at the time of writing as the share price continues to correct from a sharp downturn at the beginning of this month.

While Sonic is a much more volatile bet than the likes of Ramsay, the stock has continued to march upwards in the last 5 years, with small dips a potential opportunity for investors who like the look of the company’s strong fundamentals as it juggles operations across Australia, New Zealand, UK, Germany, Belgium, Ireland and the US.

Sonic reported some good growth for the half-year ended December 31, 2017, with net profit up 16% EBITDA up 9% and EPS rising 15%, with future guidance on earnings maintained.

Sonic will be one to watch as the company continues to strengthen its global operations, particularly in the US and Germany.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited. 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 Scott Phillips.

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