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From an investor’s point of view, blue-chip stocks are the most consistently performing companies. The Australian stock market has various ASX-listed healthcare companies. However, most of the healthcare stocks are average performers.
Blue-chip stocks are the best stocks available in the market for long term value investment with high market capitalisation. These stocks offer higher than average returns and facilitate portfolio diversification. Blue-chip stocks are safer from an investment point of view and provide stable returns.
Advantages of Investing in Blue-Chip Stocks:
Blue-chip stocks refer to the stocks of companies that have a market capitalisation in billions, are highly reputed, are well known, and have a long and successful history.
Blue-chip stocks have several advantages compared to other stocks. The key benefits are low/limited risk, assured return, portfolio diversification, earnings from the dividend, attractive market valuation, and strong financial position, among others.
Morgan Stanley revises the outlook for select blue-chip stocks
Morgan Stanley (MS), an American financial service company, has reduced its rating on CSL Limited (ASX:CSL) from ‘overweight’ to ‘equal-weight’, while ResMed Inc’s (ASX:RMD) rating was also lowered to ‘equal-weight’.
MS upgraded Cochlear Limited (ASX:COH) to ‘overweight’ after the announcement of a product recall by a competitor.
Let us discuss five ASX listed healthcare blue-chip stocks- CSL, RMD, COH, RHC, FPH.
Leading Biotherapeutic giant CSL Limited is involved in the development, manufacturing and marketing of pharmaceutical and diagnostic products, human plasma fractions and cell culture media. The company is engaged in the development, commercialisation and delivery of innovative biotherapies and influenza vaccines. CSL operates in two core businesses- CSL Behring and Seqirus.
The company updated the market with its investor presentation highlighting half year (ended 31 December 2019) performance.
For the first half of the fiscal year 2020, the company reported an 11 per cent increase in both revenues and net profit after tax (NPAT). The performance reflected steady growth in immunoglobulin portfolio, robust performance from Seqirus as well as the continued evolution of the haemophilia portfolio.
Stock information:
The CSL stock was trading at $340.180 on 20 February 2020 (at AEDT 02:12 PM), down by 0.24 per cent. The company’s market capitalisation stood at nearly $154.77 billion, with almost 453.88 million shares outstanding. CSL stock’s 52 weeks high and low prices were noted at $342.750 and $184.000, respectively.
An ASX listed world-leading digital health company, ResMed Inc is into developing high-quality medical devices for providing a superior and healthier life to patients with sleep apnoea, COPD, and other chronic diseases. The company has its software platforms that help healthcare practitioners and attendants to cater to patients either in a home or care setting. ResMed provides its services in over 140 countries.
On 30 January 2020, the company announced results for the second quarter of the fiscal year 2020 (ended 31 December 2019). The key highlights include:
- The company generated revenue of approximately $736.2, up by 14 per cent on a constant currency basis.
- The GAAP gross margin was reported at 58.0 per cent, and the non-GAAP gross margin expanded 60 bps to 59.7 per cent.
- The net operating profit of the company increased by 26 per cent and non-GAAP operating profit increased by 21 per cent.
- GAAP and non-GAAP diluted earnings per share (EPS) were $1.10 and $1.21, respectively.
Stock information:
The RMD stock was trading at $26.550 on 20 February 2020 (at AEDT 02:12 PM), up by 1.413 per cent. The company’s market capitalisation stood at nearly $37.86 billion, with almost 1.45 billion shares outstanding. RMD stock’s 52 weeks high and low prices were noted at $26.600 and $13.560, respectively.
An ASX-listed medical device company headquartered in Sydney, Cochlear Limited is engaged in offering implantable hearing solutions for providing a lifetime of hearing outcomes. The company provides cochlear implants, services as well as acoustics. 60 per cent of the sales revenue comes from cochlear implants, 29 per cent of sales revenue from services (Sound processors), and the remaining 11 per cent from acoustics that include bone conduction implants and acoustic implants.
Cochlear updated the market with its half-year 2020 results (ended 31 December 2019) and the highlights are:
- The company reported strong growth in cochlear implants with units increased by 13 per cent; the developed market units increased by 7 per cent and Emerging market units increased by 20 per cent.
- Services revenue of the company was up by 5 per cent in constant currency (CC); for Nucleus® 7 Sound Processor, the rate of penetration was high in the upgrade cycle.
Stock information:
The COH stock was trading at $242.580 on 20 February 2020 (at AEDT 02:12 PM), down by 3.566 per cent. The company’s market capitalisation stood at nearly $14.55 billion, with almost 57.83 million shares outstanding. COH stock’s 52 weeks high and low prices were noted at $254.500 and $164.000, respectively.
Ramsay Healthcare Limited (ASX:RHC)
An ASX-listed global healthcare company, Ramsay Healthcare Limited was established in 1964 and is involved in offering high-quality services and providing excellent care to the patients. The company is well-recognised throughout the healthcare sector worldwide for its quality operations and excellent record in hospital management and patient care.
CFO appointment
On 18 December 2019, Ramsay revealed the appointment of Mr Martyn Roberts as Group CFO. Currently, Mr Roberts is working as Group CFO in at Coca-Cola Amatil and will begin his journey at Ramsay in the first half of 2020. Mr Roberts has a remarkable work experience and has an excellent track history of achievement in making performance improvements. Before Amatil, he had worked for seven years at Woolworths Ltd in several senior executive roles.
Mr Roberts is an accomplished CFO with 20 years of experience, and his knowledge and achievements would be valuable for Ramsay to achieve its set targets for 2020.
Stock information:
The RHC stock was trading at $79.700 on 20 February 2020 (at AEDT 02:12 PM), down by 0.175 per cent. The company’s market capitalisation stood at nearly $16.13 billion, with almost 202.08 million shares outstanding. RHC stock’s 52 weeks high and low prices were noted at $80.930 and $58.750, respectively.
Fisher & Paykel Healthcare Corporation Limited (ASX:FPH)
One of the leading medical device companies, the ASX-listed Fisher & Paykel Healthcare Corporation Limited is a prominent developer and marketer of a broad range of products and systems. The products offered by the company are used for the treatment of obstructive sleep apnea (OSA) and for providing acute and respiratory care.
Launch of new Evora™ compact nasal mask:
On 03 February 2020, Fisher & Paykel updated the market with the launch of its new compact nasal mask- F&P Evora™ for the treatment of obstructive sleep apnea (OSA). Initially, this nasal mask would be available for patients in Australia and New Zealand from February, and later in Europe and Canada.
Stock information:
The FPH stock was trading at $23.930 on 20 February 2020 (at AEDT 02:12 PM), down by 0.042 per cent. The company’s market capitalisation stood at nearly $13.75 billion, with almost 574.54 million shares outstanding. FPH stock’s 52 weeks high and low prices were noted at $24.230 and $12.720, respectively.
