A Sector Private Investors Ignore
If I was to give one piece of advice to those starting out trading shares I’d say:
“Ignore all the stocks with busy bulletin boards, especially those with hundreds of posts with blokes bitching and fighting with each other - and go for the ones that are completely quiet.”
There’s a sector which I think is almost totally ignored by private investors and that’s the mid-east heathcare area. You’ll see hardly any posts made on shares in this area of the market. Which is great for me and generally means I can enjoy being in these stocks which tend to be far less volatile.
So I’d like to highlight one or two current favourites of mine if you don’t mind. If you do click a button and I’m gone...
I visit Dubai once a year for a sunny Christmas and new year so I know NMC Heathcare quite well as I see its hospitals as I walk around. Private heathcare is big in the Middle East - there are clinics and hospitals everywhere and the sector is growing fast.
Group revenue was up more than 18% year on year for 2014. Two new hospitals were opened in 2014, others are being expanded and more new openings are earmarked for this year. The shares paused for breath in 2014, hovering most of the time between 450 and 500 after rising from the 200 area where luckily I bought a lot of mine.
I think 2015 could see the shares get a re-rating, maybe not early on but at some point, and a break through a fiver. I would hope to see 600 or more by year end giving a very tasty 25% profit.
In a similar vein is Al Noor Hospitals which centre in and around Abu Dhabi. Again, strong revenue growth here of 20% last year and unlike NMS which has some debt, Al Noor actually has cash which should help it to grow further.
Here’s an interesting comment from Ron Lavater, CEO of the company recently: “The healthcare sector continues to be one of the fastest growing industries in the UAE due to population growth and a rapidly ageing demographic; an increasing incidence of lifestyle-related medical conditions such as diabetes and obesity; and service gaps in the current healthcare market.
Responding to the community’s escalating health needs provides Al Noor with abundant opportunities for growth in services and delivery sites. We are continuing to strengthen the company’s infrastructure, systems and processes to take full advantage of the healthcare sector’s expansion.”
Basically (and sadly) people are simply getting more unhealthy due to their poor lifestyle choices and Al Noor benefits. As does NMC.
I’m told by people living in Dubai and Abu Dhabi that both companies are well respected and their hospitals and care are second to none. I can see only growth coming from both these companies. Al Noor looks a lovely tuckaway targeting around a previous high of 1100-1200.
Any positive statements could see a sudden re-rating.
So get to know a few heathcare stocks, tuck them away for a year... and... and... drat, I can’t find a heathcare pun to finish off with. Nurse... the screens !