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.
