Why the CSL Limited (ASX:CSL) share price is up 30% in 12 months

One of the best performers on the ASX 200 over the last 12 months has been the CSL Limited (ASX: CSL) share price.

During this time the biotherapuetics company’s shares have posted an impressive 30% gain for shareholders.

Why is the CSL share price up 30% in 12 months?

Investors have been fighting to get hold of CSL’s shares after the company delivered another strong result in FY 2018.

Driven by strong immunoglobin, specialty products, and influenza vaccine sales, CSL posted an 11% increase in revenue to US$7,915 million and a 29% lift in net profit after tax to US$1,729 million.

Pleasingly, management expects another solid result in FY 2019 and has provided full year net profit after tax guidance of between US$1,880 million and US$1,950 million. This will be an increase of between 10% and 14% on FY 2018’s result.

Management expects this to be driven by continued strong demand for plasma and recombinant products, margin growth from its plasma product mix shift, and specialty and recombinant products growth.

The company is also expecting to continue outpacing the market in respect to plasma collections. It intends to open a further 30 to 35 centres during the year, adding to its current network of 206 centres.

Looking ahead the company has a number of products under development that could underpin its future growth. These include cardiovascular disease product CSL112, the potential first-in class recombinant Fc multimer protein M230/CSL730, and a new stem cell gene therapy, CAL-H, for the treatment of sickle cell disease.

Should you invest?

While CSL’s shares trade at a meaningful premium to the market average, I believe the quality of the company and its strong long-term growth potential justify this.

As a result, I think it would be a great buy and hold investment alongside fellow healthcare stars Cochlear Limited (ASX: COH) and ResMed Inc. (ASX: RMD).

5 Companies we like better than CSL

When ace stock picker Scott Phillips has a buy recommendation, history suggests it can pay to listen.

Scott recently revealed what he believes are the five best ASX stocks for investors to buy right now… and CSL wasn’t one of them! That’s right — he thinks these 5 stocks are even better buys.

See the 5 stocks

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. 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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