The healthcare sector primarily comprises companies that deliver ambulatory care in an outpatient setting as well as at home. These players use advanced and innovative medical technologies for detection, diagnosis, consultation, rehabilitation services and treatment.
Technology, for decades, has played a crucial role in numerous industries, and one of them is the healthcare industry. The continuous change in technological know-how can change the healthcare sector, with an increased focus on investments.
Generally, the economic, as well as demographic changes, threaten the quality of the healthcare demands of the citizens. Implementation of new technologies and platforms for data integration aid in offering unique solutions. These solutions help tackle traditional challenges and further assist in taking informed and proactive decisions.
It is the time of struggle for every sector because of the impact of the Coronavirus outbreak and staying calm when the market is turbulent is the best choice for investors. All the companies, including healthcare sector players, are going hell for leather to recover from the effect of this outbreak.
In this article, we are highlighting four ASX listed healthcare stocks- RMD, FPH, RHC, COH
ResMed Inc (ASX:RMD)
An ASX-listed digital health company, ResMed Inc focuses on developing high-quality medical devices to deliver a superior and improved life to individuals suffering from sleep apnoea, chronic obstructive pulmonary disease (COPD), and other chronic diseases. ResMed’s outside hospital software platform helps medical practitioners and assistants to cater to patients.
Second Quarter Fiscal Year 2020 Highlights
- ResMed disclosed that revenue for the second quarter increased by 13% to $736.2 million; up 14% on a constant currency (cc) basis.
- The Company reported GAAP gross margin of 58.0% and non-GAAP gross margin expanded 60 bps to 59.7%.
- Net operating profit rose by 26% and non-GAAP operating profit increased by 21%.
- GAAP diluted earnings per share of $1.10 and on-GAAP diluted earnings per share of approximately $1.21.
Additionally, with more than 100 million lives improved in 2019, and steady growth ahead, the Company is well on its approach to improving ~250 million lives in out-of-hospital healthcare in 2025.
ResMed’s CEO Mick Farrell commented:
On 20 March 2020, RMD last traded at $10.395, falling by 8.38% from the previous close with a market cap of 35.9 billion. The stock has nearly 1.45 billion shares outstanding, with 52-weeks highest and lowest price at $26.660 and $13.560, respectively.
Fisher & Paykel Healthcare Corporation Limited (ASX:FPH)
Healthcare sector player Fisher & Paykel Healthcare Corporation Limited is a dual-listed company listed in NZX and ASX. The Company is into providing innovative products used in respiratory care. FPH is a leader in the marketing, manufacturing and designing of these systems and products to assist clinicians for improving patient care and outcomes.
Revenue and earnings guidance update
On 17 March 2020, the Company updated the market with its revised revenue and earnings guidance for FY2020:
- As per the guidance update provided previously in February operating revenue was expected to be approximately $1.2 billion and NPAT to be ~$260-$270 million, based on NZ:US exchange ratio of 64 cents.
- According to the updated guidance now assuming an NZ:EU exchange ratio to be ~55 cents and an NZ:US exchange ratio to be ~61 cents for the rest of the fiscal year, Fisher & Paykel forestall complete year operating revenue lifted to $1.24 billion and NPAT to be in the range of roughly $275-$280 million.
- Moreover, it is notable that the respiratory humidifiers and consumables of Fisher & Paykel are directly involved in the treatment of coronavirus infected patients. Additionally, FPH stated that because of an upsurge in demand all over the world, the Company has ramped up its manufacturing production.
Further, the Company disclosed that complete results for FY2020 would be announced on Thursday, 28 May 2020.
On 20 March 2020, FPH last traded at $25.800, falling by 4.444% from the previous close with a market cap of 15.51 billion. The stock has nearly 574.56 million shares outstanding, with 52-weeks highest and lowest price at $27.960 and $14.000, respectively.
Ramsay Healthcare Limited (ASX:RHC)
A healthcare company Ramsay Healthcare Limited offers high-quality services and provides excellent patient care as well as hospital management. Ramsay Health is a large and diverse private healthcare sector player that provides primary and acute healthcare facilities from its 480 facilities throughout 11 countries.
Ramsay has various facilities and services including:
Withdrawal of earnings guidance for FY20
On 18 March 2020, Ramsay has informed that, given the ongoing high level of uncertainty surrounding the virus spread, duration and impact of COVID-19, and the hospitals of RHC across the world move towards assisting and helping governments with managing the deadly virus, the Company is withdrawing the financial year 2020 earnings guidance.
Joint venture with Remedy Health plus
According to an ASX announcement dated 12 March 2020, Ramsay Health Plus and Remedy Healthcare entered a joint venture (JV) for providing hospital-in-the-home service.
This joint venture will be operated by Ramsay Health Plus and Remedy Healthcare, a wholly-owned subsidiary of Australian Unity Limited (AUL), via Ramsay Connect Pty Ltd. Ramsay Health Plus, a subsidiary of Ramsay Healthcare, is an allied health service, offering evidence-based preventive and treatment health services to patients having complex medical conditions.
On this joint venture, AUL mentioned that entering into this agreement with Ramsay is strategically significant for AUL, as it allows Australian Unity to build up its strategic ambitions of delivering quality hospital substitution services in lesser cost settings.
On 20 March 2020, RHC last traded at $50.870, down by 7.222% from the last close with a market cap of 11.08 billion. The stock has nearly 202.08 million shares outstanding, with 52-weeks highest and lowest price at $80.930 and $50.860, respectively.
Cochlear Limited (ASX:COH)
A Sydney based, ASX-listed healthcare player, Cochlear Limited is a leading medical device company, and it has its regional offices in the US, Europe and the Asia Pacific.
US Patent Infringement Case Adverse Appeal
US Court of Appeals has declared the US District Court award of US$268 million in patent breach damages against COH.
Cochlear mentioned that the judgment would not disrupt the Company’s business or customers in the United States, as the patent at issue in the litigation has expired.
Moreover, the Company remains convinced that it can meet future cash needs. Mr Howitt stated that for the determination of cash requirements for the business in the upcoming months, the Company had factored in this adverse judgment.
On 20 March 2020, COH last traded at $159.860, falling by 6.695% from the last close with a market cap of 9.91 billion. The stock has nearly 57.83 million shares outstanding, with 52-weeks highest and lowest price at $254.400 and $159.860, respectively.
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