SHL - Moving on from the COVID ‘pop’

Topped up on my SHL holding yesterday.

I think there is a market misread on this stock and at around $30/$31 it is oversold.

Anything you read about SHL invariably references it’s windfall gains from Covid testing. It’s true ....it happened.... and the stock price did get to dizzying levels....however pre COVID it was a stock on an upward trajectory and the ‘windfall gains’ have not exactly been pissed away ....they have strengthened the balance sheet enormously and the ongoing buybacks put this company on a very firm footing. Further acquisitions can be readily financed.

It may take another 12 months for the market to recognise that, post the COVID testing revenues washing right through, you’re still left with a solidly performing company with growing core (ie ex COVID testing) revenues.....the COVID testing was just an aberration....not something to continue ‘punishing’ the stock about (its 34% off its highs now)

I believe healthcare is one of the sectors to be going forward and it’s a good time to accumulate this quality healthcare stock while it’s oversold and out of favour.

There’s no guarantee in this bumpy market SHL won’t go lower of course ....it might head south of $30 again however with a PE of 10 and a dividend of 3.25% it’s downside looks limited to me.