CONSENSUS VIEW: BUY
performing stock in the segment over the past 12 months with a return of 56%, has operations in SA and the UK, where it provides healthcare services on contract to the state-owned National Health Services (NHS), which faces government spending cuts. Netcare said at the release of its annual results in November that it expected demand for private healthcare in SA to remain strong and to support its growth over the next few years.
Of nine analysts polled by INET BFA, eight rated it a buy and one a hold. Trading at a P/E of 25, the stock is certainly no longer cheap. “The hospital stocks are looking good, but be careful of the price,” says Beelders.
One fund manager, who feels local equities in general are overpriced at the moment, cautions against aggressive share-buying. “The moment you have to justify an investment in A because it looks cheap relative to B, it’s probably time to opt for option C: cash,” the analyst said. “Another option is to look at equities abroad. Given the option between Aspen and GlaxoSmithKline at the moment, for example, GlaxoSmithKline would win hands down.”
Jun ’ 14