This ASX 200 share is 'one of the best businesses in the market': fundie

Healthcare stocks outperformed during COVID-19 as demand for their products and services surged.

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S&P/ASX 200 Index (ASX: XJO) shares met with wildly varying fortunes in the months, and indeed years, following the onset of the global pandemic.

ASX travel stocks, as you'd expect, were among those that got absolutely smashed. And this sector has taken more than two years to rebound following the virtual halt of global air travel in April 2020.

On the flip side, ASX 200 healthcare shares tended to strongly outperform after COVID-19 became an unwanted household name as demand for their products and services surged.

That outperformance means that some of these top companies are struggling today as markets work to rebalance the post-pandemic supply and demand dynamics.

Which is not to say there aren't some potentially juicy opportunities out there.

A group of people in a corporate setting do a collective high five.

Image source: Getty Images

Why this ASX 200 share is 'one of the best' on the market

Speaking to Livewire, David Moberley, portfolio manager at ClearLife Capital named medical device company Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) as the ASX 200 share he doesn't currently own but that tops his watchlist.

Why doesn't he own Fisher and Paykel just now?

"Unfortunately… COVID was a huge beneficiary for them. A lot of their machines were put out into the market to support hospitals over that COVID treatment period. And the industry, at the moment, is trying to digest some of that inventory," Moberley said.

At the moment, ClearLife is awaiting a better entry point as they examine the demand outlook for the company's devices. Moberley explained that they're "having a look at that inventory and when it draws down," adding that the ASX 200 share "looks good on a medium-term view".

On that medium-term view, Moberley is quite bullish on the outlook for Fisher & Paykel Healthcare:

It's one of the best businesses in the market. The balance sheet's rock solid, management is really strong, and it's a global leader in its space. Its Optiflow oxygen therapy is basically close to a monopoly position, and they're very underpenetrated. So we're talking single-digit type penetration and the opportunity is huge for them.

Fisher & Paykel Healthcare share price snapshot

Going back to the first year of the pandemic, the Fisher and Paykel Healthcare share price gained 62% in the first eight months of the year (3 January to 28 August).

However, 2022 has been a different story, with the ASX 200 share down 43% year to date.

It is currently up 1% at $17.87 in late afternoon trade on Tuesday.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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