Good healthcare shares are almost always in high demand, with many investors perceiving that healthcare is both a defensive business and likely to see significant growth over the long term. Here's my take on whether these 3 well-known healthcare operators are a buy today:
CSL Limited (ASX: CSL)
CSL is a researcher and manufacturer of blood products for immune therapies and coagulation disorders, among others. It also owns a vaccine business, Seqirus, which has been unprofitable in recent times and is being turned around. CSL also has an extensive research pipeline of future treatments for things like heart attacks and sickle-cell disease. The only drawback is the price, as CSL's prospects are well known and it is commonly regarded as Australia's best company. If I knew I could take a 10-year time frame, I'd consider buying a small stake in CSL today, with the view to adding it on any price weakness.
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
Fisher & Paykel is a designer and manufacturer of oxygen masks and breathing apparatus; a booming industry in the USA, its major market. Although seemingly expensive, Fisher & Paykel is moving manufacturing to Mexico and building large factories to meet anticipated future demand. I'd consider taking a small stake in the company at today's prices, although a patent infringement lawsuit and counter-suit against ResMed Inc. (CHESS) (ASX: RMD) adds extra risk. Like CSL above, Fisher & Paykel is quite richly priced and I'd suggest buyers start with a small stake and a view to opportunistically increasing it over time.
Sirtex Medical Limited (ASX: SRX)
Sirtex shares have been hit hard by the failure of several important clinical trials, as well as the firing of former CEO Gilman Wong for improper share trading. The clinical trials mean that Sirtex is unlikely to expand the 'indications' (potential uses) for its SIR-Spheres treatment which ultimately means a smaller potential market. The new CEO has several ideas for cutting costs and growing sales in the current market, but were I not a shareholder already, I'd be inclined to wait on the fence while I see how it pans out.
