The defensive nature of the healthcare continues to make it an attractive choice for investors, however, the valuations are tracking pretty close to our price targets currently. One subsector where we see some upside is aged care. With regards to the regulatory concerns in Australia, we’re becoming a little more comfortable. For both Japara (JHC) and Regis (REG), we would like to see outlook statements confirming that growth is continuing in the business, despite the government cuts from FY18 onwards. We are expecting ~10% EPS growth over the next couple of years. However, there are brokers out there assuming 0% EPS growth. If we’re right, we expect the share prices to respond positively, so we’ve got about 10% upside in our target prices at the moment. In the video below, Morgans Senior Analysts Scott Power & Derek Jelinek also review Blackmores, Resmed, Ansell, Healthscope, CSL and Cochlear.


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