Health was a bit of theme this week for CMC Markets’ Michael McCarthy, however, he notes that the long-term demographics that support the healthcare sector means that stocks in that sector are rarely cheap.
McCarthy likes Regis Healthcare as the stock is down 10% plus after a modest pullback.
“In my view it is a good opportunity to take exposure to the aged care sector,” McCarthy says.
McCarthy does not like Medibank Private.
“Medibank is once again subject to persistent selling, sliding back towards $2.10,” McCarthy says.
He says that both revenue and expenses are subject to regulation, and the risks of competitive threats and a changing environment in his view far outweigh the potential drivers that have Medibank trading on its current valuation.
For Elio D’Amato of Lincoln Indicators, this week’s theme is all about oil.
While Citi brokers updated Oil Search (OSH) in Buy and Hold – what the brokers say [1], D’Amato does not see much upside in the energy stock.
“Whilst Oil Search may look to be trading at a discount, the company continues to operate in a tough environment with lower commodity prices. Further commodity price weakness and sector uncertainty will potentially see the company continue to trade below valuation,” D’Amato says.
“However, currently we believe there are better exposures to be had in the market considering the current environment,” he says.
D’Amato prefers Carsales.com (CAR) given its growth outlook.
“Carsales continues to deliver stable growth in domestic revenue and invest in operations overseas that will see the company potentially have further international avenues for revenue growth,” D’Amato says.
[2]Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.