Value to be found in small cap healthcare Andrew Smith,...

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