Whilst it's true that CSL has underperformed, over the past year I've been watching the iShares Global Healthcare Index ETF (IXJ).
What I've noticed over the past year is that whilst many stock valuations have gone absolutely rampant across a number of sectors, Margaret Giles from Morningstar posted an article on NAB titled
10 best U.S. blue-chip stocks to buy for the long term. Seven out of the ten stocks noted were healthcare stocks. None of the companies mentioned included the likes of J&J, Eli Lilly, Novo Nordisk, United Health, AbbVie, Abbott, Siemens which are all included within the index ETF mentioned, which has seen modest gains relative to the major indexes. But the stocks mentioned in the article are from the perspective of the analyst.
IXJ is up about +4% over the year (current). Meanwhile, INX & COMP are up approx +24% & +30% (current) respectively. Even the XJO has outperformed global healthcare considerably. The announcement of RFK Jnr. on November 14 didn't help the healthcare sector. That is, unless you're a dentist.
Whilst RMD and FPH have knocked it out of the park (after forming lows for whatever reason) FPH is up approx. +4-6% from it's 2020 highs and Resmed is down approx -8% from it's highs in September 2021. Whilst CSL has languished, it would be worth noting that over that same period from Resmed's highs, the difference in share price between the two is +1% in Resmed's favour and 1.5% in favour of FPH. But hey, anyone can pick a data point to support their argument. What's that saying? There's lies, damn lies and statistics.
Even Cochlear had a prolonged flat period before rebounding in late in 2023 and into 2024. Compare the pair:
My point is that (with the exception of stocks connected to the hype of GLP-1's) the healthcare sector globally hasn't seen the euphoric valuations that have recklessly been applied to sectors within our local index (banks, tech, consumer discretionary). When you consider the meteoric rise of the S&P 500 that has been bolstered by just a handful of stocks then suddenly, long term valuations for healthcare looks extremely attractive for not only future growth, but also defensiveness.
That's my take. But don't take it from me.
(20min delay)