Bellevue Healthcare Share Discussion Threads

[speedsgh] 29/7/2022 12:55

Bellevue backs dental stock to make investors smile again - https://citywire.com/investment-trust-insider/news/bellevue-backs-dental-stock-to-make-investors-smile-again/a2392334

[rambutan2] 07/7/2022 21:02

Also, interims to 31 May released:

[rambutan2] 07/7/2022 20:59

June, perhaps the turning point month:

[ram376s] 04/7/2022 09:24

Covid share gdr. ripe ,

[speedsgh] 09/6/2022 07:22

Thanks @rambutan. A great read as always.

"Finally, it bears repeating that we see no macro-economic or regulatory reason to have a less positive view on the dynamics of the global healthcare market today than we had six or twelve months ago. Our companies operate in an environment where demand is largely inelastic and is set to continue to rise due to the twin demographic drivers of a rising and concurrently ageing global population, allied to the expansion of the available treatment options through continued progress in biomedical research and product development.

Because demand is inelastic, they have considerable pricing power to pass on rising costs and generally already have high gross margins so non-labour input costs are only a small driver of the resultant operating margin. Again, we see no reason why these longstanding ‘defensiveR17; attributes of healthcare have changed in the recent past or why they are likely to change in the future. If you are worried about consumption patterns and inflation or stagflation then we believe that you cannot do much better than to own healthcare assets.

Finally, there is no reason why one should think these attributes are stronger for large companies than small ones. The only difference is that a broader product portfolio gives you lower systematic product-specific volatility in sales and earnings. Healthcare is healthcare at the end of the day.

Forget the creams and pick away!
Hindsight is the worst form of wisdom, since we cannot do very much about the past. As a consequence, we must accept that we are where we are in terms of our relative and absolute performance since H2 2021. We noted last month how we regularly review the portfolio from the perspective of a clean sheet of paper. We reiterate again that, looking forward on any objective measure, this is a collection of very cheap,
high quality growth assets and hope that the previous analyses offer some additional colour as to why we are so convinced this is the case.

Russia’s war against Ukraine and the lack of any obvious strategic objective that could enable an early resolution of it clearly complicates any long-term analysis of the broader economic and geo-political outlook. China’s zero-COVID nonsense is a further cloud on the economic outlook and again is one where an early resolution (i.e. capitulation) seems fanciful.

We are not so blinkered as to not recognise the risk that markets could yet fall further and that not everyone has the appetite to take on more short-term risk because the longer-term opportunity seems so incredibly compelling. We do though, and your managers have again added to their overall personal holdings in the Trust during May."

[rambutan2] 08/6/2022 21:04

Manager's monthly musings:

[jonwig] 26/5/2022 05:51

dlp - the asset managers in their monthly factsheets believe the shares are seriously undervalued, and make a good case for that. It's not as though BBH are the only one in the sector suffering! See link in #92.

[dlp6666] 25/5/2022 20:36

I'm holding this as a diversified way to gain income in what seemed to be reasonable growth area.

Do other holders think BBH will come good, or is it time to ditch?

Thanks

[chc15] 09/5/2022 14:41

I think May might be worse, what a tumble!

[rambutan2] 05/5/2022 20:09

Telling it how it was:

"April 2022 will be seared into our memories for all the wrong reasons. With the Trust’s net asset value declining 10.4% to 164.5p; it is in our top three worst months for absolute performance and stands alone as our worst ever month for relative performance; we under-performed the index by 10.4% over the month, despite FX being a material tailwind (+430bp)."

[rambutan2] 29/4/2022 15:06

March factsheet:

[speedsgh] 28/3/2022 06:25

Fairly extensive sector article on IC website...

Can tech save healthcare? -

[jonwig] 26/3/2022 06:42

Yes it does, thanks.
Clickable link:

[xtrmntr] 26/3/2022 05:58

https://feeds.acast.com/public/shows/investorschronicleI'm not sure if the above link will work.Paul Major, manager of Bellevue Healthcare Trust (BBH), believes the future of healthcare will be very different from what we have today and looks to invest in companies at the forefront of making change possible - from those improving disease diagnosis to companies delivering care at home.  In this podcast, he tells the IC's Mary McDougall where he thinks the most important innovations are developing in healthcare, how he approaches investing in the companies involved and explains the investment case for some of the trust's largest holdings. 

[speedsgh] 22/3/2022 20:39

BB Healthcare ups gearing to tap into small stock weakness -

BB Healthcare (BBH) has changed its name but kept faith in smaller healthcare companies after the sector selloff by increasing its borrowing to take advantage of lowly valuations.

The £1bn closed-end fund, which has rebranded as Bellevue Healthcare Trust, suffered as the healthcare sector endured its longest selloff since 1994. It had been the darling of the pandemic, but small and medium-sized stocks suffered the worst of the recent downturn in sentiment.

Commenting on the investment trust’s recent annual results, fund managers Paul Major and Brett Darke were stoical about the damage the falls have done to their portfolio and said they planned to increase the gearing – or borrowing – in the fund to snap up stock bargains.

BBH reported a 10.3% total investment return for the year to 30 November, which lagged the 16.3% rise in the MSCI World Healthcare index, and the defensive sector fell further behind the MSCI World index, which advanced 23.3%.

This year has proved difficult. The shares are down 10%; the 12-month return, including dividends, has shrunk by 4.2% due to a ‘violent intra-sector rotation’ in response to high inflation; while rising interest rates, a tech selloff, and war between Russia and Ukraine have darkened the outlook for global economic growth.

Major and Darke said they were ‘somewhat lost for a compelling explanation’ as to why healthcare had shouldered such a heavy burden, although the trust’s five-year performance remains credible: a total shareholder return of 83% beats the MSCI World Healthcare return of 70%.

‘Nothing fundamental has changed in the last four weeks, or even four months,’ they said. ‘There are more people alive than before. They are older and they will get sick, with increasingly complex conditions – these are irrefutable truths.

Gearing, which stood at 4.9% of net asset value on 30 November, has doubled to 10%, according to data from Numis Securities.

‘If the last two years have taught us anything, it is that everything changes very quickly in such a febrile environment,’ the managers said.

Despite the year-to-date fall, the trust has avoided falling to a discount enabling it to issue £18.6m of shares, which combined with the £35.1m increase in borrowings has given them the cash to add to existing holdings and add three new companies ‘one each in tools, diagnostics, and medical technology subsectors’, though they did not disclose the names.

‘One of these is a repurchase of a company that we have owned before but exited on valuation grounds,’ they said.

In a post-results briefing this month, Major (above) said the healthcare sector was the best hedge against inflation, citing its strong performance against gold and the consumer prices index over the last 25 years, with the exception of the financial crash in 2008 when gold performed better.

Major, who also runs the WS Bellevue Healthcare open-ended fund with Darke, was optimistic about the sector that spends $10tn globally, buoyed by continuous and reliable demand, which will be boosted by ageing populations suffering from chronic pain.

‘While people talk about inflation and stagflation, the data is unarguable: the best hedge you’ve got against inflation is to buy the one thing that nobody wants to consume, but has no choice and will consume: healthcare,’ he said.

While the managers are anticipating a bounce-back in healthcare stocks, they said market corrections ‘can go on for much longer than one may realise’, citing the 2000 tech crash as a ‘classic example of prolonged suffering’.

‘We cannot be confident that the mid-cap healthcare rout is close to its denouement, but we can objectively discern value when we see it, and that time is now,’ they said.

[speedsgh] 02/3/2022 11:02

Paul Major, portfolio manager of BBH, is presenting on Thurs 17 March at 11am as part of Kepler's Spring Summit entitled Ideas for your ISA.

More info & registration here - hxxps://web.cvent.com/event/2ea662dc-4669-4a39-a39e-d793efc168a4/summary

[speedsgh] 02/3/2022 10:57

Thanks, jonwig.

[jonwig] 02/3/2022 10:34

The old website still works. I've added the new name to the header.

[speedsgh] 02/3/2022 10:27

Results analysis from Kepler Trust Intelligence -

The team behind BB Healthcare Trust (BBH) are bullish on the long term outlook and gearing up after big falls in share prices among healthcare stocks.

We spoke to the managers shortly before the trust released its final results for the year ended 30 November 2021, on Monday this week, and they described what they see as a 'fantastic relative opportunity' for investors in the sector after a punishing year.

The trust delivered NAV total returns of 10.3% over period, underperforming the MSCI World Healthcare Index total return (GBP) of 16.3%. Share price total returns over the period were slightly higher, at 11.4%.

The board has proposed a final dividend of 3.015p per ordinary share in respect of the financial year ended 30 November 2021 and, if approved at the forthcoming AGM, this will bring the total dividend for this year up to 6.03 - ahead of the previous year's. For the year ended 30 November 2022 the board is proposing a total dividend of 6.47p per ordinary share.

Kepler View

While BB Healthcare has clearly had a difficult and frustrating year, our view is that the trust has been hit by the indiscriminate sell-off in markets we have experienced - especially felt amongst mid and small cap stocks to which BBH is largely exposed.

When we met the managers last month they told us it was their view that "history will look back on this moment as a fantastic relative opportunity for long-term healthcare investors", and we note that the team - who have typically used gearing sparingly - have increased the level of gearing to c.10%, underlining their bullishness.

BBH offers a complimentary exposure to equity income investors, with an attractive level of dividend derived from capital, and an underlying exposure that is very different from typical income exposures to the healthcare sector…

[speedsgh] 01/3/2022 18:43

Change of Name -

The Company confirms that, pursuant to the powers conferred under the Company's Articles of Association, the Board has resolved to change the Company name to Bellevue Healthcare Trust plc with immediate effect.

The name change is to ensure consistency between the name of the Company and its Investment Manager, Bellevue Asset Management (UK) Limited. The change of Company name was made by the Registrar of Companies on 1 March 2022.

With effect from 8.00 a.m. 2 March 2022, trading will commence under the Company's new name, Bellevue Healthcare Trust plc.

The Company's TIDM, ISIN and SEDOL will remain unchanged.

[speedsgh] 28/2/2022 12:07

Final Results -

Excerpts from the Chairman's Statement, under header Performance:

Though the Company underperformed the Index over the last financial year, I hope that readers will agree that over a five-year period the Investment Manager has delivered attractive returns that compare very favourably to its peer group. The Investment Manager provides more analysis of performance elsewhere in this report; I would highlight that there were periods of the year that the Company was materially ahead of its benchmark.

Short-term variations should never change an investment process - and hence it is important to assure investors that the Investment Manager remains true to its investment process and continues to focus on bottom-up fundamental analysis to drive stock selection predicated on superior LONG-TERM returns.

Excerpts from the Chairman's Statement, under header Outlook:

Continuing on from previous reports, a big driver of market sentiment continues to be the pandemic and in that regard I make no predictions in my outlook. It is clear that this situation has thrown into stark relief that innovation is continuously needed in healthcare and perhaps the rate of that innovation is speeding up.

The pandemic has also led to a large backlog of need, thus as we 'normalise' it is likely that there will be a lot of 'pent-up demand'.

Your Board continues to believe that your Company is and will continue to be well placed to capitalise on investment opportunities in healthcare to achieve the stated investment objective...

[speedsgh] 03/2/2022 11:13

Excerpts from Jan 2022 factsheet. The whole factsheet is a worthwhile read...



What a month! January did not play out as we, or frankly anyone else, expected. This has been the second-worst month performance-wise for the MSCI World Healthcare Index since the inception of the Trust and indeed the fourth-worst month in the last 20 years.

Funereal flummery from various commentators falls short inadequately explaining the fissiparous factor behaviour visible in the market meltdown. In truth, we too are somewhat lost for a compelling explanation, but doing this job whilst maintaining sanity behoves one to accept that markets can be irrational for protracted periods. Indeed, it is what you choose to do during those difficult periods that defines you as an investor.

Thus, we are where we are. Where are we though? Nothing fundamental has changed in the last four weeks, or even four months. There are more people alive than before. They are older and they will get sick, with increasingly complex conditions – these are irrefutable truths. Whatever happens to their discretionary income, they will still consume healthcare products and services.

We firmly believe that history will look back on this moment as a fantastic relative opportunity for long-term healthcare investors and have acted accordingly...

... There are various and rather childish stock market aphorisms involving monkeys and picking bottoms, with the pithy observation that engaging in such an activity in public is unseemly and likely to cause embarrassment. This may well be true, but in the end it is part of a portfolio manager's job to do so and it is also true that embarrassment can often be quelled with sufficient pecuniary reward.

We cannot be confident that the mid-cap healthcare rout is close to its denouement, but we can objectively discern value when we see it, and that time is now. We enter February with a portfolio of undiminished quality and an unchanged investment strategy, but one that is re-weighted to take maximum advantage of any return to more typical market dynamics and enhanced with an increased level of gearing that reflects our conviction in the opportunity that lies before us.

We remain optimistic not because we are optimists, but because we are realists.

[alter ego] 06/1/2022 14:45

agreed, red ink all over portfolios so it's unlikely to be stock specific. Money being taken off the table all over.

[jonwig] 06/1/2022 14:44

All the bio-related stuff is down - look at WWWH. Just a rotation thing?

[toffeeman] 06/1/2022 14:43

Everything (virtually) is down today