The Motley Fool

Why Sigma Healthcare shares have surged 25% higher in November

Sigma Healthcare Ltd (ASX: SIG) shares have been one of the top performers throughout the month of November.

It’s been a rollercoaster of a ride for much of the ASX 200 this month. The S&P/ASX 200 Index (INDEXASX: XJO) fell lower in the first week before climbing towards a new record high late in November.

Sigma shares have been one of the key contributors as the Aussie healthcare stock has rocketed 25.86% higher to $0.73 per share.

Why were Sigma shares so successful in November?

The biggest factor driving Sigma shares towards their new 52-week high valuation has been a mooted deal with My Chemist/Chemist Warehouse Group (MC/CW Group).

Sigma confirmed talks with the Aussie pharmacy group in early November and said it could resume the supply of fast-moving consumer goods (FMCG) to MC/CW Group.

This announcement saw Sigma climb higher on the ASX in early November while a further update put the icing on top.

On 25 November, Sigma confirmed that it had signed a major first-line agreement with MC/CW Group. The agreement is effective from 1 December and is expected to reach full run rate by July 2020.

Sigma shares climbed higher on the news and have been continuing their strong run throughout this week.

Despite some initial costs for transitioning the agreement, management expects positive earnings benefits from the new deal.

Are there other ASX healthcare stocks I could buy?

While Sigma shares have been performing strongly this month, so too have a number of ASX 200 healthcare companies.

CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH) are continuing to race higher despite their already-lofty valuations.

Likewise, the Sonic Healthcare Ltd (ASX: SHL) share price is one to watch after continuing to set and smash its own record highs.

The ASX healthcare sector looks to be charging higher on strong earnings and investor demand for non-cyclical stocks in 2019.

If you're after exposure outside of healthcare, check out these 3 ASX dividend stocks today!

Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

Click here now to access this free report.

Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and Sonic Healthcare 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.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!