One of the commonest mistakes investors inexperienced investors make is confusing price and value. This will lead to investors searching at the wrong end of the market for cheap stocks, when the best opportunities are normally at the other end via those that offer strong earnings growth.
Below I have three businesses to consider in the healthcare space that are fast growing and may yet deliver outperformance in 2016.
Ramsay Health Care Limited (ASX: RHC) is a private hospital operator with established operations in Australia that is also expanding into Europe and China. The group enjoys the tailwind of an ageing population which means rising demand, while operating costs at its hospitals remain relatively fixed. This gives the opportunity for margin expansion. Selling for $67.30 shares are expensive, but the group remains a strong long-term bet.
Sirtex Medical Limited (ASX: SRX) is a cancer treatment specialist that is seeing dose sales of its SIR-Spheres therapy continue to grow at compound growth rates around 20% per annum. The business has a large addressable market and multiple clinical trials in progress aimed at promoting future sales of its products. Selling for $40.81 it may head higher in 2016.
Nanosonics Ltd. (ASX: NAN) is a junior healthcare business that sells sterilisation equipment to mainly US hospitals in the private and public sector. It reportedly has a market-leading product that helps hospitals deliver superior healthcare and sales have been on a steady upward trajectory. The company has an experienced management team and may offer the most upside in 2016 given it sells for just $1.54 today.
ResMed Inc. (CHESS) (ASX: RMD) shares have been on a steady upward trajectory thanks to its market-leading sleep apnea products sold in North America and internationally. Family run with an impeccable long-term track record the business probably offers better value at $8.28 for long-term conservative investors than any of the above.
