4 ASX 200 shares to buy in an unmissable sector: expert

Yes, 2022 has been tough enough with all the turbulence and uncertainty. But unfortunately the picture is still pretty vague as we head into 2023.

How hard will the steep interest rate rises from the past six months hit Australian consumers going into Christmas? Will the unemployment queues lengthen? Will Australia sink into recession?

These are all still legitimate questions without clear answers.

Amid such chaos, Switzer Financial Group director Paul Rickard feels like the healthcare sector might be the most reliable to invest in.

It is considered a defensive sector, as people will still spend money on their health through tougher economic times. And the population is rapidly ageing in most developed nations.

But there is also a growth flavour in many ASX-listed healthcare stocks.

“Australia’s a little bit different because we have companies that are really focused on a global marketplace — most of their revenues actually come from outside Australia,” Rickard said on Switzer TV Investing.

“So the companies that represent the major part of our healthcare sector tend to command pretty high price-earnings multiples.”

So which are the specific ASX shares that Rickard would go for at the moment?

Four top health stocks to buy now

Rickard is a “huge fan” of biotech giant CSL Limited (ASX: CSL).

The CSL share price has so far disappointed in the post-COVID era, remaining flat for the year to date.

“It hasn’t really done a lot this year. [But] brokers like it.”

CSL shares closed Tuesday at $297.32 apiece.

Rickard pointed out that it currently has a broker consensus target of almost $325, and he suspects “at some stage” the stock will burst out to that.

The Ramsay Health Care Limited (ASX: RHC) share price has sunk more than 10.6% since mid-September when a takeover bid was taken off the table.

Rickard suspects this now presents a great entry point.

“It’s a hospital operator but it’s diversified,” he said.

“In the low $60s, it’s looking like a pretty attractive proposition to me.”

Ramsay shares closed at $63 each on Tuesday.

Resmed CDI (ASX: RMD) has served investors admirably over recent years.

“It’s been a hugely successful growth story… Up from a low of about five years ago, it was trading about $8 to [last year] over the $40 mark.”

The price has pulled back this year, with the stock closing Tuesday at $34.09.

Rickard can’t see any reason why the respiratory equipment maker can’t continue its growth narrative.

“I think, again, another really good stock for your portfolio.”

Pathology provider Sonic Healthcare Limited (ASX: SHL) was Rickard’s fourth pick.

It was a major beneficiary of COVID testing volumes in Australia, but now its growth fortunes lay offshore.   

“Although Sonic really dominates the pathology sector in Australia, it’s now a company where over 60% of its revenue is coming in from outside Australia,” said Rickard.

“It’s big in the United States, it’s big in Europe and they’re even more important markets than what’s going on in Australia.”

The share price has lost 31% year to date, closing Tuesday at $31.65.

“It’s come back a bit as a result of the reduction in PCR testing,” said Rickard.

“In the low $30s, it looks to have reasonable value.”

The post 4 ASX 200 shares to buy in an unmissable sector: expert appeared first on The Motley Fool Australia.

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More reading

• Will ASX 200 shares bottom before the year is out? Here’s Macquarie’s ‘best guess’
• To $300 and beyond! Why this top broker says CSL shares are a buy right now
• Are these the very best ASX 200 shares to buy for 2023?
• How much dividend income will $20,000 worth of CSL shares buy right now?
• Considering CSL shares? Broker says this other ASX 200 healthcare share has 30% upside

Motley Fool contributor Tony Yoo has positions in CSL Ltd. and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. The Motley Fool Australia has recommended Ramsay Health Care Limited and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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