Jump to content

SHL - SONIC HEALTHCARE LIMITED


ShareCafe

Recommended Posts

  • 1 year later...
  • Replies 72
  • Created
  • Last Reply

Top Posters In This Topic

  • 8 months later...
  • 1 year later...
  • 8 months later...
  • 7 months later...
  • 3 years later...

Health sector winners no matter who takes the election

He says Sonic Healthcare and medical center, pathology and imaging player Healius will benefit under either Labor or Coalition as imaging and primary care receive additional funding. And imaging groups Integral Diagnostics and Capitol Health are likely the biggest beneficiaries under Labor's plans.

https://www.afr.com/business/health/health-...20190403-p51ahu

Link to comment
Share on other sites

  • 1 year later...

Pathology tester Sonic Healthcare has confirmed a bumper half year, with net profit up 166% to $678 million off the back of smaller but still strong 33% rise in revenue to $4.4 billion for the half.

 

Sonic has rebounded strongly from the initial bumpiness from COVID19 shutdowns that saw it forced to halt medical testing in a range of jurisdictions for varying periods of time.

 

That problem eased as the lockdowns came off and the company was able to offset the early fall by processing more COVID-19 tests as virus surges in the US in the closing months of 2020 which saw its laboratory business strong.

 

Sonic says it has processed more than 18 million COVID 19 tests in 60 countries.

 

Excluding COVID19 testing, Sonic’s base business revenue eased 1% for the six months to December.

 

The company boosted interim dividend to a high 36 cents a share.

 

CEO Colin Goldschmidt said in a statement to the ASX this was still a strong result, because it was a very significant improvement versus the dramatic falls in base business we experienced from mid-March through May 2020.

 

Our Laboratory division achieved organic revenue growth of 39% in the half year, with very strong growth in the USA, Germany, Belgium and the UK. Without the benefit of COVID19 testing, our Imaging division grew revenue by 14%, much higher than long term industry averages, an amazing outcome which included taking market share.

 

On the back of this strong revenue growth, the operating leverage inherent in Sonic’s business was very apparent, with the level of profit growth far exceeding that of revenue. Our existing infrastructure of specimen collection facilities, courier networks, laboratories and other facilities, equipment, IT, management, staff and supply chains were all crucial to handle the increased patient volumes we have been, and continue to be, experiencing.

 

Our global base business revenue (excluding COVID testing) declined by 1% versus the comparative period, which was a very significant improvement versus the dramatic falls in base business we experienced from mid-March through May 2020. It appears our base business is becoming increasingly less affected by social restrictions and fear of infection, through better community understanding of the dangers in delaying or avoiding essential healthcare services. Sonic is also benefiting from our geographical and healthcare sector diversification.

 

 

Link to comment
Share on other sites

  • 4 months later...

Should I Buy Sonic Healthcare Shares 2021? Highlights Full Analysis

 

Share Price

 

Over the past year, Sonic healthcare is up 30.92% and has more than recovered from the COVID-19 recession pushing to new all-time highs. The current sonic healthcare shares price is $37.81, at the upper end of its 52-week range of 28.53-38.39.

 

Over the course of the past ten years, SHL is up 637%, averaging 50.63% per year. This is attributed to 42.26% in capital gains and 8.38% from its historically lucrative dividend yield.

 

About

 

Sonic Healthcare is the market leader in laboratory medicine/pathology in Australia, Germany, Switzerland, the UK, and Northern Belgium (Flanders), and the third-largest private laboratory company in the US.

 

Sonic Imaging is the second largest diagnostic imaging provider in Australia. Sonic Imaging is made up of eight practice groups, with more than 100 radiology centers geographically spread across Australia.

 

Sonic Clinical Services (SCS) brings together a broad spectrum of health services

 

Dividend History

 

SHL has paid biannual dividends every year since 1996. This includes the 2008 GFC and COVID recession. SHL pays a 20-30% franked dividend. The current average yearly dividend for SHL shares is $0.9819 giving them a decent yield of 2.3% or a gross yield of 2.6% at the current share price.

 

Fundamental Summary

 

The fundamentals indicate that SHL is reasonably priced. The PE of 18.94x is within the market average of 15-20x. SHL also has a relatively good ROE of 16.4%. The business debt to equity ratio is relatively high at around 42%.

 

Financials

 

Sonic Healthcare released it’s last full-year results in August 2021, here’s the highlights:

 

FY2019 result in line with guidance – underlying EBITDA growth 6.7% (constant currency)

Revenue growth 11.6% to A$6.2 billion

EBITDA growth 13.3% to A$1.1 billion

Net profit growth 15.6% to A$550 million

Final dividend up 4.1% to $0.51 per share (full-year dividend up 3.7% to A$0.84)

Strategic acquisition of Aurora Diagnostics completed in January 2019

Strategic divestment of non-core GLP Systems completed in June 2019

Growth momentum strong – major opportunities ahead

Technicals

 

The general consensus within the Technical Analysis community is currently Bullish on SHL shares. The moving averages and Technical Indicators seem to indicate a Strong Buy.

 

In summary, the upside is likely to prevail as long as $36.8 is support. The alternative scenario is that a downside breakout of $36.8 would call for $35.7 and $35.1.

 

Insider Ownership And Trading

 

Sonic healthcare has no significant insider ownership, accounting for only 0.7%. The general public and institutions are the major shareholders owning 61.6% and 32.9% respectively. Private companies own 4.4% and the remaining 0.4% is owned by 0.4%.

 

Veritas and Blackrock are the substantial shareholders in Sonic Healthcare.

 

In 2021 there has been substantial trading activity in SHL. There has been slightly more selling, although nothing alarming to us.

 

Sonic Healthcare And The COVID Recession

 

At the beginning of the pandemic the company was materially impacted and responded with executives taking a 50 percent pay cut, a hiring freeze, and thousands of staff stood down. This large impact was mostly from the halt of routine testings during the beginning of the pandemic.

 

Although portions of Sonic dropped during the COVID pandemic, the company as a whole is positioned well to grow coming out of the pandemic. Not only is it back to business as usual but they are one of the key players in testing for COVID-19 across several counties.

 

For instance, their United States business, which makes up 27 percent of sales, is set to gain a piece of the spend of $US1.6 billion to expand COVID-19 testing. CEO Dr Goldschmidt said it could double or triple its testing if needed.

 

Sonic is the world’s third-largest provider of clinical laboratory services and is the largest private pathology operator in Australia.

 

Sonic’s position is secure and trends are looking positive at the company and business level

 

CEO, Dr Goldschmidt

 

Future Prospects

 

Sonic Healthcare released the following outlook:

 

Expect demand for COVID-19 testing to continue into the foreseeable future, volumes unpredictable

Increasing acquisition, contract, and joint venture growth opportunities

Supported by a very strong balance sheet, leaving sonic in a position for the strong future growth

Currently bidding on significant opportunities in Australia, UK, USA, and Alberta, Canada

Geographical diversification, providing increased opportunities for expansion

Underlying strong healthcare growth drivers unchanged

Leading market positions in Australia, Germany, USA, UK, Switzerland

Sonic provides essential healthcare services, base business increasingly resilient to impacts of a pandemic. We see the companies operation to benefit and show continued growth following on from the pandemic. The companies history of strategic acquisitions has and will continue to make them a core healthcare provider across multiple countries.

 

These acquisitions have and will continue to be a core business strategy for Sonic.

 

Full Analysis: https://prophet-invest.com/should-i-buy-son...are-shares-2021

 

Thanks for reading :)

Link to comment
Share on other sites

For what it is worth, this, in summary, would be my reasoning for not buying at this point in time:

 

Morningstar Quantitative Ratings

Valuation Rating Overvalued

Star Rating

Fair Value Estimate 33.558

Fair Value Difference -11.75% (-3.942)

Uncertainty High

Economic Moat Narrow

Financial Health Strong

1-Star Price > 39.07

5-Star Price < 28.82

 

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...