The market is taking a breather at present and I believe the pause will last around 2-weeks, before the press again gets excited about a potential rate cut in...

Nicholas Forsyth

Market Matters

The market is taking a breather at present and I believe the pause will last around 2-weeks, before the press again gets excited about a potential rate cut in April. As readers know, I am looking to move away from a yield dominated portfolio over coming weeks/months, to a growth based bias. For me, there remains far less risk around the growth in the healthcare space than the resource sector, hence today's note as I explore future opportunities. Healthcare stocks remain a clear growth area as the population ages rapidly. Everybody wants exposure to this sector, but the question remains at what price? The largest issue with healthcare stocks is that they are already priced for significant growth, leading me to use technical analysis to identify good risk/reward entry levels: The current Price/Earnings (P/E) Ratio of the ASX200 is 21.67, but the healthcare stocks are generally higher e.g. CSL 29.2, Resmed (RMD) 29.4 and Ramsay Healthcare (RHC) 42.5. Generally, avoiding companies with high P/E's is not wise investing, however we need to feel comfortable that the P/E is justified. See Detailed Report marketmatters.com.au/blog/post/morning-report-thursday-5-march-2015/?publicurl=ACDB4


Nicholas Forsyth
Nicholas Forsyth
Director
Market Matters

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