One of the best performers in the healthcare sector in the last 12 months has been the Ramsay Health Care Limited (ASX: RHC) share price.
The private hospital operator's shares have rallied a solid 14% during the period, vastly outperforming rival Healthscope Ltd (ASX: HSO) which has seen its share price tumble by 14%.
Is it too late to invest in Ramsay?
I don't believe it is. Even though its shares are changing hands at a lofty 29x trailing earnings, I believe there are several catalysts that will allow the company to grow earnings at a strong enough rate to justify the premium.
The first is of course ageing populations around the world. With its global operations, I believe Ramsay is in a great position to profit from the growing demand for health services brought about by ageing populations.
Another catalyst for growth in my opinion is increasing chronic disease burden. Management expects the proliferation of chronic disease and the emergence of targeted therapies to result in a greater demand for healthcare over the coming years.
Finally, I believe the expansion of its hospital network both through brownfield developments and acquisitions will be another way for Ramsay to continue growing its bottom line at a strong rate.
I wouldn't be surprised to see the company expand into the lucrative China market in the future. Whilst a joint venture fell through last year as it didn't meet the company's high standards, I don't think it will be long until we see Ramsay sizing up the country again.
Overall, with such bright prospects I believe Ramsay's shares remain in the buy zone for patient buy and hold investors despite rallying hard in the last 12 months.
