It's no surprise ASX-listed global healthcare stocks were good investments in 2014 with a falling Australian dollar, huge growth opportunities and market-leading products some healthcare businesses have really excelled.
Back in May 2014 I wrote this article on three of the best and identified another key strength which underpins the market's love affair with them.
Since May all three have gone on to deliver market-thumping returns and new record share price highs. Alas, I only own one of them but given all three retain bright outlooks it's worth revisiting what should make them attractive to investors.
CSL Limited (ASX: CSL) is a global market leader in the provision of life saving blood product medicines and vaccination therapies to the public and private healthcare sector worldwide. Its products are used in hospitals to perform common tasks like stabilising patients' blood pressure, or treating burns and trauma victims.
Put simply government healthcare spends have no limit, national governments could all double their healthcare budgets tomorrow and there would be still demand for greater spending. That's a nice spot for CSL shareholders and it's no surprise the stock has soared around 25% since May to sell for $86.41 on a price earnings approaching 27.
Ramsay Health Care Limited (ASX: RHC) is a private hospital operator smashing through record share price highs recently to sell for $59.09 today. Ramsay can grow both organically and acquisitively around the world and enjoys the tailwind of aging populations and increased demand for private healthcare as public healthcare operations come under ever-increasing pressure.
Margin growth is the key positive for this business as it can raise prices while maintaining a relatively fixed cost base to operate its hospitals. The stock now trades on a price-earnings around 33 and is up around 32% since May.
ResMed Inc. (CHESS) (ASX: RMD) is another market-leading sleep treatment business that has enjoyed the US dollar's strength while steadily growing global sales. Margins have come under pressure recently, but new product development looks likely to keep it ahead of the game in the future.
ResMed is another business with a potentially huge global market and product quality that allows it to consistently grow the bottom line alongside revenue growth virtually bullet proof in its consistency. At $7.31 the stock is at a record high and up around 36% since May to trade on a price earnings approaching 27.
All three of these businesses remain quality long-term opportunities but for the best returns you need to find businesses with equal opportunity but on better valuations.
