MENU

Is the Ramsay Health Care share price in the buy zone?

Although the Ramsay Health Care Limited (ASX: RHC) share price has now climbed 10% since hitting a 52-week low of $51.89 in the middle of October, it is still down significantly over the last 12 months.

During this time the private hospital operator’s shares are down approximately 18%.

Is the Ramsay Health Care share price in the buy zone?

Whilst I think that Ramsay Health Care is one of the highest quality companies on the Australian share market along with the likes of healthcare sector peers CSL Limited (ASX: CSL) and ResMed Inc (ASX: CSL), the tough trading conditions that it continues to face means it is a little too soon for an investment for me.

The recent acquisition of Capio AB could be a boost to its growth in the long term and could open the door to further bolt-on acquisitions in Scandinavia, but it isn’t expected to contribute in the near term. Management recently advised that the acquisition is expected to have a neutral impact on its earnings in FY 2019.

As a result, Ramsay Health Care continues to target core EPS growth of just 2% this year.

Unfortunately, with the tough trading conditions it is facing showing little sign of easing, I suspect that growth in FY 2020 could be equally challenging for the company.

I feel this makes the company’s shares reasonably expensive at 22x earnings and see more value elsewhere in the sector with the likes of CSL and ResMed.

Alternatively, fast-growing mid cap healthcare shares such as infection control specialist Nanosonics Ltd (ASX: NAN) and imaging software company Pro Medicus Limited (ASX: PME) could be worth a look.

Although both shares trade at a notable premium to the market average, I believe their growth profiles go some way to justifying this.

And don't miss these buy-rated growth shares that have been tipped to shine in 2019.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2019."

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited and Pro Medicus Ltd. The Motley Fool Australia has recommended Ramsay Health Care Limited 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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!