Ramsay Healthcare – Buy Signal

Ramsay Health Care is under Algo Engine buy conditions and has now been added into the ASX 100 model portfolio.

We see price support developing near $62, following Ramsay Health Care advising that Paul Ramsay Holdings has completed the underwritten block trade sale of 22m shares in the Company to institutional investors at $61.80 per share.

Buy RHC at $62.00

Ramsay Healthcare – Valuation Review

Ramsay Health Care is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

RHC trades on 21x forward earnings, dividend yield of 2.4% and underlying EPS growth into FY20 of 2 – 4 %.  Forecast FY20 revenue $13bn, EBIT $1.2bn, EPS $3.00 & DPS $1.55.

In a low rate environment, we see the new trading range for Ramsay within the $65 – $70 band.

We see buying support building at the $64 price level.

 

Ramsay Firms After AGM

Shares of RHC have been edging higher as investors respond favorably to their recent AGM on Tuesday.

With respect to their Capio AB acquisition, management continues to target overall positive core growth of up to 2% in FY 2019.

With the share price at  22X present earnings, we would have liked to seen a higher rate of expected core growth to sustain a rally from current levels.

RHC remains under an ALGO sell signal but we expect the $51.00 level to show solid support and an ALGO buy signal in the medium-term.

Ramsay Health

 

 

 

 

Ramsay Healthcare Continues To Slip Lower

Ramsay Healthcare remains in a Algo Engine “sell” condition, however, after the share price correction from $85 to $52, we now see value beginning to emerge.

Shareholders in Swedish hospitals group Capio have given the approval to RHC’s 51% owned French subsidiary A$1.3bn takeover offer, to proceed.

With all conditions now satisfied, the deal’s expected settlement will be early next month.

Watch for RHC to turn positive and generate an Algo Engine buy signal in the coming months.

RHC

Ramsay Healthcare – FY18

Ramsay Healthcare reported FY18 results in-line with market consensus, however, the FY19 guidance was below expectations.

Underlying earnings increased 7% in FY18 and that growth rate is likely to slip to 4 – 5% in FY19. With the stock on a forward yield of 2.7% we see further downside risk to the share price in the short-term.

RHC is a high quality business and we’ll be watching for the next Algo Engine buy signal.

Material earnings benefits from new hospital  projects are expected in the coming years; we see both Healthscope and Ramsay Healthcare as long-term value plays with a defensive yield.

Buy Healthscope today and remain patient for the entry condition into Ramsay.