2 stocks to drive future performance following a 35% return in six months

We are buying…
CSL Ltd (CSL)
The top 3 plasma producers control ~85% of the US market. CSL is the lowest cost operator with ~30% market share. CSL reached a high of $290 per share in January but has declined markedly to the current level of around $210. This was predominantly driven by potential issues around tariffs, margin contraction at Behring and confusion around the results presentation in August and spinoff of the vaccine business Seqirus. Healthcare stocks have also lagged for the past 4 years, despite the strong long term outlook. We consider these issues to be largely transient. A clear base is now forming as sellers run out of conviction and sentiment begins to improve.

We are buying…
Healthco Healthcare and Wellness REIT (HCW)
HCW is the largest healthcare REIT on the ASX, encompassing 26 properties across hospitals, medical centres and research facilities. Occupancy is 99% and the weighted average lease (WAL) to expiry is a lengthy 11.5 years.
11 of the hospitals are leased by Healthscope, which entered voluntary administration in May 2025. Prior to that, HCW was paying out ~8c pa which equates to a yield of ~11% at the current price.
HCW has stated that (if required) “…conditional agreements have been reached with alternative operators.” Despite this, HCW is trading at just 44% of its net tangible asset backing. Once the Healthscope issue is resolved one way or another, we would expect a large rerating.