A (re)visit to the hospital: Healthscope and Ramsay

9 Comments

1. 

   James Hicks
   August 23, 2017 at 12:55 pm:

   Hi Roger & Team,

   Do you still feel the market is treating temporary conditions as permanent given the latest results and guidance?

   Cheers,

   James

   • 

     Roger Montgomery
     August 23, 2017 at 3:17 pm:

     We are working on it now James. Growth and market share are what we are discussing.

2. 

   Craig
   April 12, 2017 at 11:25 am:

   Hi Roger,

   As you say, the demographics of the healthcare sector are compelling. But as a value investor, how do you get your head around the risks associated with changes in government policy? I know that this can work both ways (look at the banks) but do you try to quantify this risk in some way in your valuation models somehow?
   Cheers

3. 

   Edward
   April 4, 2017 at 7:47 am:

   Hi Roger and team,

   Thank you for your continued analysis and commentary.

   I am interested in your thoughts on the recently announced retirement of Chris Rex (Ramsay) and Robert Cooke (Healthscope) as well as the appointment of Gordon Ballantyne to succeed Cooke at Healthscope. Will the change in leadership alter your position on either organisation?

   More generally, I understand that NSW Health released a tender in late 2016 for collaborative development of new hospitals throughout regional NSW (Shellharbour, Wyong, Bowral and Maitland). Recognising that Ramsay’s further expansion in to greenfield locations has been constrained by the ACCC in recent times (ie. proposed acquisition of Wollongong Day Surgery was rejected), prompting brownfield redevelopment of existing hospitals and expansion in to community pharmacy, will the collaborative development model remove these impediments to further domestic growth? Are you aware of the timeline for submission and evaluation of EOI’s by interested parties, presumably Healthscope and Ramsay?

4. 

   Kelvin Ng
   April 3, 2017 at 12:21 pm:

   Hi Roger, what do you think of the new CEO for HSO?
   Thanks.
   Kelvin

5. 

   rob barnett
   March 30, 2017 at 10:33 am:

   Roger,
   In your valuation analysis for RHC & HSO how do you account for the much higher historical returns on invested capital that RHC has relative to HSO. It would appear that historically RHC generates much higher incremental sales per dollar of new capital invested (noting that HSO has much higher pre-tax operating margins). How is RHC able to do this & is it sustainable long term?

   • 

     Roger Montgomery
     March 30, 2017 at 11:23 am:

     Healthscope’s ROE is reduced by the intangibles on the balance sheet that relate to acquisitions when it was last listed, prior to private equity taking it private and relisting it. If you look at the returns on incremental equity capital you will find the differences are smaller.

6. 

   Robert Warren
   March 28, 2017 at 9:11 am:

   I will be moving to the old fart stage of life in the next few years and after a lifetime of hard labor the body ain’t what it used to be hospitals and many other age and health related companies are all a must for investors thanks for all the wonderful information Montgomery allows readers to enjoy

7. 

   Greg Dunn
   March 27, 2017 at 5:18 pm:

   Hi Roger, read this article in Money in January — What happened to the SRX part
   Cheers,
   Greg