The share price of Monash IVF Group Ltd (ASX: MVF) has been on a rollercoaster over the last 12 months. The share price is almost the same as it was a year ago at $1.88, but it has seen a high of $2.52 and a low of $1.66.
Monash IVF has a number of brands that it operates under including Monash IVF, MyIVF, Next Generation Fertility and Repromed. Monash IVF currently has a market capitalisation of $442.5 million.
Here are three reasons why I think it could recover a lot of its lost share price:
Couples are having children older
There is a growing trend for couples to have children later in life, which sadly for the couple means there is a greater chance of needing medical intervention to have a child.
This plays right into the hands of Monash IVF because they have the latest medical treatments which can hopefully cure or help whatever the issue is.
Advanced (and expensive) techniques
A common tactic by any company to increase sales is to diversify with more products. As Monash IVF is one of the most advanced IVF providers, it will hopefully stay ahead of the curve in terms of treatment development.
As time goes on Monash IVF is able to offer patients better treatments or develop a new treatment for a problem that wasn't able to be treated in the past. These new treatments expand Monash IVF's potential patient base and generate more revenue.
Expansion overseas
Monash IVF could turn into a global IVF player as it expands overseas. It currently only has operations overseas in Malaysia, but it could steadily expand into other countries like rival Virtus Health Ltd (ASX: VRT) is doing.
Risks
The main risk to Monash IVF is from competition. Virtus Health will want to increase its IVF market share. There is also competition from low-cost providers such as Primary Health Care Limited (ASX: PRY), low-cost treatments may not be appropriate for all patients but could damage revenue growth for Monash IVF.
There is also a risk the government may not grow its funding for IVF providers as fast as it has done in the past.
Foolish takeaway
Monash IVF is one of the better healthcare stocks on the ASX in my opinion. There will always be risks with companies, so now could be the time to pounce whilst the share price is low. It's currently trading at 14x FY17's estimated earnings with a grossed-up dividend yield of 6.69%.
If Monash IVF is too risky for your portfolio, you should consider these three great blue chips instead.
