Hunt for bargains in healthcare

IT might seem obvious that healthcare stocks are a buy when the NHS is once again under strain and Covid is surging. But despite the booster rollout, the stock market performance of this sector has been volatile of late.

This means the valuations of some companies are attractive.

Staying away from vaccine suppliers is probably a good idea as their shares are already highly priced. Andrew Millington, head of UK equities at asset manager Abrdn, likes numerous healthcare companies operating outside of the coronavirus bubble – the likes of Abcam, Genus and Dechra Pharmaceuticals.

Ryan Hughes of wealth manager AJ Bell likes investment trust Worldwide Healthcare. He says: ‘The trust has struggled over the past year as a result of exposure to the Chinese stock market and an out of favour biotech sector.

‘But the experienced team at healthcare specialist OrbiMed, who manage the trust, should deliver long-term investment returns.’

The fund has generated a return of 41 per cent in the past three years.