ASX healthcare stocks are shining today and staging a recovery from the past week's sell-off.
At the time of writing, the S&P/ASX Healthcare Index (ASX: XHJ) is up more than 1% against the benchmark S&P/ASX 200 Index (ASX: XJO)'s 0.5% gain.
Regis Healthcare Ltd (ASX: REG) is an ASX healthcare stock that is on a roll today, surging 5% to fetch $4.36 per share at the time of writing.
Despite no market-sensitive announcements from the company, the stock is one of the top-performing healthcare names at the time of publication on Wednesday, according to CommSec data.
With many focused on health darlings like ResMed Inc (ASX: RMD), you don't want to miss the forest for the trees. There are plenty more names in the healthcare sector.
Let's dive into this lesser-known ASX healthcare stock.
ASX healthcare stock catching a bid
Regis Healthcare is one of Australia's largest aged care providers. The stock is up more than 78% in the past twelve months.
In May, Macquarie analysts rated the ASX healthcare stock a buy. According to my colleague James, the broker cited favourable recommendations from the Aged Care Taskforce as its reasoning.
These recommendations are aimed at supporting a sustainable and innovative aged care system, which bodes well for Regis' future growth, Macquarie says.
The anticipated increase in earnings through 2028 from the industry changes led Macquarie to lift its earnings estimates and set a price target of $5.50 on the ASX healthcare stock.
Financials also a talking point
Regis Healthcare's latest financial results are another talking point, in my opinion. For the first half of FY24, the company reported:
- Revenue of $480.1 million, up 26% year on year
- Pre-tax earnings of $52.1 million, a 16% increase compared to the previous period
- Net profit of $16.3 million, up a staggering 527% from the same period last year
These underlying figures paint a positive picture of growth and profitability.
Whilst it operates in aged care, the ASX healthcare stock's management is rejuvenating the company's balance sheet.
For instance, the company's recent acquisition of CPSM has added five more aged care homes to its books.
This brings its total to 68 residences with 7,604 beds under management. In my view, this expansion has been a significant driver behind the ASX healthcare stock's gain over the past 12 months.
Foolish takeaway
Regis Healthcare is catching a strong bid on Wednesday despite no company-specific news.
With healthcare stocks in general staging a recovery today, it's not unlikely that investors saw an opportunity to buy a high-quality franchise with solid H1 FY24 financials.
It could also be speculation. Who's to truly know?
Past performance is no guarantee of future results, though. As always, conduct your own due diligence and consider chatting to a professional.
