I thought that the soft full year result and guidance from private hospital operator Ramsay Health Care Limited (ASX: RHC) this morning demonstrated why it has been best to avoid its shares over the last 12 months.
I continue to believe Ramsay should be avoided and would suggest investors look to buy these healthcare shares instead:
CSL Limited (ASX: CSL)
Earlier this month this global biotech company posted a 15% increase in revenue to US$7.6 billion and a 29% jump in net profit after tax to US$1.73 billion. Key drivers of this impressive result were the company’s Immunoglobulins and Specialty businesses. Management appears confident that this strong form will continue in FY 2019 and has provided guidance of net profit after tax in the range of $1,880 to $1,950 million. While its shares are not cheap, I feel it deserves to trade at a premium and would be a quality long-term buy and hold investment.
Mayne Pharma Group Ltd (ASX: MYX)
Unlike CSL, this pharmaceutical company released a disappointing full year result this month. Mayne Pharma posted a 7% decline in revenue to $530.3 million and a 33% decline in adjusted net profit after tax to $60.3 million. This was largely expected after significant price deflation in the generic drugs market. However, things appear to have stabilised in the generic drugs market now which could put Mayne Pharma in a position to return to growth this year. This will be supported by the upcoming release of several potentially lucrative new products.
Nanosonics Ltd (ASX: NAN)
Nanosonics is a fast-growing infection control specialist which I believe has a bright future ahead of it. The company’s key trophon EPR product has been growing its installed base in the U.S. at a strong rate over the last few years thanks to being regarded as best in its class and environmentally friendly. While I think that this product alone has significant potential, the company plans to release complementary products in the near future that will boost and diversify its revenue.
If you like shares like Nanosonics then I think you'll love these stars of the future.
We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.
That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.
We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!
Motley Fool contributor James Mickleboro 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.