The CSL share price is up 35% in 12 months: Too late to invest?

The CSL Limited (ASX: CSL) share price has followed the market lower on Monday and is down 1.3% in afternoon trade.

Despite this decline the global biotech giant’s shares have put on a gain of 35% over the last 12 months.

Why is the CSL share price up 35% in 12 months?

Investors have been fighting to get hold of CSL’s shares thanks to its impressive performance in FY 2018 and positive outlook for the year ahead.

For the 12 months ended June 30 2018, CSL delivered a reported net profit after tax of US$1,729 million, which was an increase of 29% on the previous year and slightly ahead of its guidance.

Strong immunoglobulin demand, a 24% increase in its specialty products sales, and a massive 53% increase in influenza vaccine sales were just three of numerous drivers of the strong earnings growth last year.

Pleasingly, although its growth is expected to moderate a touch in FY 2019, management remains confident that it will achieve further bottom line growth.

In fact, it has provided guidance of US$1,880 million to US$1,950 million, which will be an increase of 10% to 14% on FY 2018’s underlying result. I suspect that management is being conservative with this guidance and wouldn’t be surprised to see it upgraded at its half year results.

Should you invest?

I think that CSL is a great long term buy and hold investment option for Australian investors.

Due largely to its strong core business, solid immunoglobulin demand, its expanding plasma collection network, and pipeline of lucrative products, I believe the company is well-positioned to continue its positive run for many years to come.

Overall, I would class its shares as a buy along with fellow healthcare shares ResMed Inc (ASX: RMD) and Telix Pharmaceuticals Ltd (ASX: TLX). Though, it is worth noting that the latter share is a small cap pharmaceutical company and may be unsuitable for investors with a lower tolerance for risk.

Motley Fool contributor James Mickleboro owns shares of TELIXPHARM DEF SET. The Motley Fool Australia has recommended 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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