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SHL - Sonic Healthcare

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SHL had an interesting day, started high and up all day with strong buying......


shl trades 21 june 13.gif


...and from the chart it may go on with it.


shl 21 Jun 13.gif


Cheers
Country Lad
 
Sonic Healthcare gapping up today and at all-time highs. Currently trading at $26.24. It's been having a great run since October 2017.

big.chart-SHL.gif
 
SHL re ASF 2019-06-10.png


With the last close of SHC at $26.48 it looks set to take out the high at $26.60 which is just 40 cents lower than the ATH of $27.00.
 
After thinking a lot with a very depressed portfolio, entered into SHL.
My judgement (not speculation :)) was based on the recent financial result - all positive ups still to take the market sentiment, SHL withdraw their market forecast.
When under CORONA most of the stocks excepting those producing any kind of protection against virus, cleaning aid, toilet tissue, hand wash are going on south, SOnic quietly making money in undertaking in situ blood testing for probable corona. The testing regime is a slow phase but will be in big way. I believe Sonic has got a contract.
With sicknesses, people will have to buy medicines.
The professionalism of staff on new acquisitions and the whole team is excellent.
Insider purchases
https://www.asx.com.au/asxpdf/20200319/pdf/44g6hq09kly7wl.pdf
https://www.asx.com.au/asxpdf/20200305/pdf/44fsk9g03rfnrk.pdf

https://www.asx.com.au/asxpdf/20200305/pdf/
https://www.asx.com.au/asxpdf/20200219/pdf/44f6zm3g7bk1w4.pdf - overall good performances.
 
Agree, good company that I recently decided I would like a few shares in one day. That will take a windfall from gold mining shares though. It's not high ROE - around 11-12% - but it builds book value while dividends are reliable and trend up. They don't seem concerned by debt. Seems a good long term buy?
I read somewhere (probably Motley Fool) that while they are getting work doing Wuhan Virus testing it is lower margin than their typical work. Their testing for other conditions is taking a back-seat due to hospitals being preoccupied with CV19 treatment.
I'm negative on the monthly chart; suspect it will participate in another general market downleg, jmo
 
Miner said:
After thinking a lot with a very depressed portfolio, entered into SHL.
My judgement (not speculation :)) was based on the recent financial result - all positive ups still to take the market sentiment, SHL withdraw their market forecast.
When under CORONA most of the stocks excepting those producing any kind of protection against virus, cleaning aid, toilet tissue, hand wash are going on south, SOnic quietly making money in undertaking in situ blood testing for probable corona. The testing regime is a slow phase but will be in big way. I believe Sonic has got a contract.
With sicknesses, people will have to buy medicines.
The professionalism of staff on new acquisitions and the whole team is excellent.
Insider purchases
https://www.asx.com.au/asxpdf/20200319/pdf/44g6hq09kly7wl.pdf
https://www.asx.com.au/asxpdf/20200305/pdf/44fsk9g03rfnrk.pdf

https://www.asx.com.au/asxpdf/20200305/pdf/
https://www.asx.com.au/asxpdf/20200219/pdf/44f6zm3g7bk1w4.pdf - overall good performances.
Click to expand...
After many fall out, enjoying a little win with SHL on my portfolio has shot 28% in less than 2 months.
My moral boosted up when I read this research report on SHL - attached.
Still holding and thinking aloud, if COVID 19 gets passed how SHL will stand up against any fall in this FY 2020 itself ??
BTW - Goldman says BUY.
But Blackrock has reduced its holding - that interesting and confusing too. Still holding and waiting others to share their view on SHL.
https://www.asx.com.au/asxpdf/20200601/pdf/44j87tgrrzldl2.pdf
 

Attachments

  • SHL RESEARCH REPORT BW.pdf
    1,018.8 KB · Views: 15
Miner said:
But Blackrock has reduced its holding
Click to expand...


I am up about 25%.
I note that ii (Intelligent Investor Australia) also had it as a buy (not anymore, now it's a hold) with a target of $35.

Blackrock reduced its holding, but their largest holder Veritas Asset Management LLP increased its holding
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Opinions will always vary based on a variety of different factors
shl.png
 
SHL has restored guidance, for this year at least, with underlying EBITDA likely to be in line with last year, i.e. FLAT. The Company not will to go beyond, to FY 21.

During Covid
- the board, and top executives have taken a 50 per cent pay cut,
- a hiring freeze has been implemented
- thousands of staff were furloughed as normal testing volumes fell off a cliff.

CEO Colin Goldschmidt said, "the pandemic and associated lockdowns precipitated dramatic falls in base patient volumes and revenues, almost simultaneously across Sonic’s global businesses. While its laboratories in Australia, the USA and Europe were testing thousands of patients every day for COVID-19, it was not enough to offset the major decline in normal testing volumes.

Dr Goldschmidt said in recent weeks, the majority of Sonic’s divisions have returned to pre-COVID-19 base volumes and revenues, but base revenues in the key USA market, the UK, Ireland, and Belgium are still below pre-COVID levels. He added that the positive trend in each of these continues.

“Sonic’s global leadership teams have responded magnificently to the COVID crisis, making use of established executive experience, trusted culture, team spirit and wide-open Sonic collaboration channels at national and international level," he said.

Dr Goldschmidt added that Sonic’s trading results for March and April 2020 were substantially below forecast, with May results stronger than expected, with this positive trend continuing through June.
 
The market is under-appreciating how long the COVID testing is going to go on for.

Sonic Healthcare is a global pathology company, it does a lot of standard testing, but it's had a big boost from COVID testing.

It's got global growth, it's got an excellent management team, good cashflow generation
 
@Miner call on SHL in April forming well so far.
My doubt expressed about the monthly chart not vindicated. However, pointing out the all Data Quarterly chart below: SHL has never been this volatile looking and those long upper shadows for Sept and Dec Qtrs is pretty off-putting to me. Volatility around all time high levels is a bit ominous in my book and the whole of Cal 2020 is volatile, not just the earlier Qtrs.

I found the pick below for 2021on Livewire.
Interested me that she expects ongoing testing for anti-body presence in patients after vaccine injections to provide another flow of work.

But leaves the question hanging for me as to an earlier claim mentioned on this thread that Covid work is lower margin than traditional testing that they do and hospitals are preoccupied with Covid and operating under restrictions (Covid safety precautions?) right through the chain of consultation, referral, diagnostic testing, surgery which allegedly impacts higher margin types of work for Sonic.

The above consideration though is an example of how easily I get turned off an investment by uncritical acceptance of some comment that I read somewhere from someone whom I think presumably has done some primary research. I have no idea personally of whether Sonic has lost higher margin work or not. I'm a follower at heart regrettably, not a contrarian.

Sonic Healthcare (ASX:SHL)
Kelli Meagher, Sage Capital

"I think a good stock for 2021 is Sonic Healthcare. I think the market is under-appreciating how long the COVID testing is going to go on for. It's already had a good boost. As we know, Sonic Healthcare is a global pathology company, it does a lot of standard testing, but it's had a big boost from COVID testing.
Post the vaccine, COVID testing isn't going to go away. We also don't know how long the vaccine actually lasts. So there's another leg of growth that's available to Sonic, which is antibody testing, which tests whether you are immune to it and whether the vaccine worked for you for three months, six months.
It's got global growth, it's got an excellent management team, good cashflow generation, and with all the COVID cash that it's generating it should be able to buy... assets around the world to increase its geographical footprint. It also pays a nice little dividend yield of 4%, and it should do well in 2021."

Quarterly
big - 2021-01-16T151953.451.gif
 
After returning five day lock down in Perth and rush on getting COVID 19 PCR tests by Clinical Pathology I found the 82 pc ownership is held by SHL.
As a drive by customer for PCR today I noticed few things which impressed me.
1. In coming traffic management
2. Professionalism of the staff members
3. Smooth handling
4. Smiling faces
5. Extended hours including weekend

6. Increased push by some of the organisations to send their FIFO and office workers to PCR.
Underline shows the huge revenue potential for SHL and the candidate management framework speaks very highly of the organisation.
I am taking a long term view of SHL which would be upwards only - my opinion and biased because i am holding SHL and only regret why did not believe my own judgement and have had a better chunk of SHL to cover the losing stocks on the same portfolio.
DYOR.
Directors are reaping benefits in getting rights within couple of months - next could be in February 21
All good but the chart (experts please comment) is depressed unless it is seeking a base point.

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al Pathology I revisited SHL
 
"One Australian company that will capitalise on these healthcare trends is global pathology company Sonic Healthcare, which is now the world's third-largest medical laboratory company. While 2020 has seen record profits for Sonic due to COVID-19 testing, but the company's share price has fallen due to concerns about COVID-19 testing falling sharply and represents an interesting investment opportunity. Elevated testing demand will continue, augmented by serology or antibody testing, as travellers apply for time-limited immunity passports. The number of tests ordered per patient is expected to rise along with the median age of the population in the company's key pathology markets of Europe, Australia and the USA.

- Hugh Dive, Atlas Funds Management ..Chief Investment Officer
 
Dona Ferentes said:
"One Australian company that will capitalise on these healthcare trends is global pathology company Sonic Healthcare, which is now the world's third-largest medical laboratory company. While 2020 has seen record profits for Sonic due to COVID-19 testing, but the company's share price has fallen due to concerns about COVID-19 testing falling sharply and represents an interesting investment opportunity. Elevated testing demand will continue, augmented by serology or antibody testing, as travellers apply for time-limited immunity passports. The number of tests ordered per patient is expected to rise along with the median age of the population in the company's key pathology markets of Europe, Australia and the USA.

- Hugh Dive, Atlas Funds Management ..Chief Investment Officer
Click to expand...
Ironically with the second wave coming with UK and Brazil strings, companies like SHL, CSL, ZON, Of course Pfizer and alike will only be lifted after a short break.
Disclaimer - Hold SHL
 
More Covid tests meant more money for Sonic Healthcare in the year to June 30, with the pathology group arguably the single biggest beneficiary of the pandemic on the ASX – both the first wave and now the Delta variant.

But there was an apparent downside in the financial year results: uncertainty about the outlook saw the shares fall initially. The company told the ASX that it will not provide earnings guidance for FY22 due to COVID-19 related unpredictability:
“The pandemic has the potential to cause fluctuations in both COVID-19 testing revenues and the base business, although the base business has become increasingly resilient to the impacts of pandemic waves.
Click to expand...
“The underlying growth drivers for healthcare services remain unchanged. Base business fluctuations are also mitigated by geographical and business sector diversity. The COVID-19 Delta variant is currently driving increases in COVID-19 testing revenues,” directors said.
Click to expand...

Sonic reported a massive 149% leap in net profit for 2021 to $1.3 billion. This was on a 28% surge in full-year revenues to a record $8.7 billion.

The $1.3 billion net profit tells us how much money Sonic made out of what is an essential part of the anti-Covid toolkit, as did the final dividend of 55 cents a share, up from 51 cents a year ago. That made a record 91 cents a year for the full financial year, up from 85 cents a share.

Around 30 million coronavirus tests have been processed to date at Sonic’s 60 labs around the world. The company said its volumes were lower in the second half than the first, but said there was a resurgence in demand recently due to the rise of Delta.

Outside of COVID testing, global base revenues were up 6% on last year. It was also up 4% from 2019, the last ‘normal’ year for the company (and every other company and country!).

Sonic Healthcare highlighted that its base business “has become increasingly resilient to impacts of pandemic waves and benefits from geographical and business diversification”.
 
Added SHL in the yearly comp.
Health is a growth area, as long as the clients only get sick and don't get killed off.
Growth industry as the average age of the population increases and more and more of the baby boomers become old farts.
mick
 

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