TRADING AT around 1350c and on a multiple of 17 times, Netcare – worth almost R20bn on the JSE – is expensive and trading close to its best levels in 12 months. However, the share has proven to be relatively defensive over the past year, as it’s withstood the short-term pullbacks in equity markets and has seen a sustained rally from its low of 880c a year ago to current levels.
Prospects for private healthcare in both its primary markets – South Africa and Britain, where it has a controlling stake in General Healthcare Group (GHG) – remain strong. Growing pressure on the welfare state in Britain, particularly its National Health Service (NHS), means a rising dependence on the private sector.
In SA, Government’s been forced to acknowledge the role of the private sector in not only maintaining standards but also delivering many of the cutting edge services