Ann: Response to Strategic Agreement on Prostheses List Review, page-7

Value to be found in small cap healthcare

Andrew Smith, Perennial Value Management
As contrarian value investors we prefer to exit sectors once they become too hot – for example, we have sold out of our exposure to Lithium and Infant formula.

One sector which is under-the-radar at the moment is healthcare, after the sector was knocked around for several years as a result of changing government regulations. With the government recently taking a more collaborative approach to reforms we believe the risks have reduced in the sector while ageing demographics continue to be a tailwind.

Our preferred exposures are:

1) Lifehealthcare, which imports, develops and distributes high end surgical devices. The stock has valuation support (10.3x FY18 PE) and an energetic management team.



https://www.livewiremarkets.com/wires/high-conviction-small-caps-straight-from-the-experts