Shares in the healthcare sector have been a favourite amongst investors during the coronavirus pandemic. Here are 3 ASX healthcare shares that have shown resilience during the pandemic and are trading at all-time highs.

Ansell Limited (ASX: ANN)

Ansell is a global leader in developing, manufacturing and distributing health and safety protection solutions. In mid-March, I wrote an article about Ansell and the potential surge in demand for safety and protective equipment. I wish I acted on this hunch as the Ansell share price has surged 86% from its lows in March. The company is currently trading at all-time highs.

With people becoming more aware of safety and hygiene protocols due to COVID, Ansell is well poised to benefit. In late March, Ansell reaffirmed its FY20 guidance for earnings per share, citing strong demand for its hand and body protection products. Ansell also assured investors that its balance sheet remains in a strong position and the company is working to maximise its product output.

ResMed Inc (ASX: RMD)

ResMed is another healthcare share that has surged to all-time highs. The company is a global manufacturer of medical devices and treatments focused on the management of respiratory and sleep disorders. The coronavirus pandemic has seen a surge in demand for the company’s invasive and non-invasive ventilators.

In Q3, ResMed tripled its ventilator production to produce more than 52,000 units for an urgent Australian Government contract. The ResMed share price has the potential to see further upside in the short term as fears of a second wave of coronavirus infections grow.

Fisher and Paykel Healthcare Corp Ltd (ASX: FPH)

Fisher and Paykel have been one of the best performers on the S&P/ASX 200 (INDEXASX: XJO) for FY20. The company specialises in manufacturing and the distribution of products used in respiratory care. Fisher and Paykel recently published its full-year report for FY20 which saw Fisher and Paykel record an 18% increase in operating revenue of NZ$1.26 billion for the year.

The company attributed the boost in revenue to an increase in demand for its Optiflow nasal high-flow therapy. Fisher and Paykel noted strong hardware sales and demand from hospitals for products used to treat COVID-19.

This demand has also been reflected in the company’s share price which is trading near all-time highs. With fears of a second wave of coronavirus infections emerging, the Fisher and Paykel share price could see further upside as demand for ventilation treatments and respiratory humidifiers increase.

Should you buy?

ASX healthcare shares are usually a more defensive option during tough economic times as individuals still need medical care. The coronavirus pandemic will likely add to the essential services of healthcare as many individuals may pay more attention to their health.

In my opinion, investors should compile a watchlist of healthcare shares that could blossom in 2020 and beyond, in particular, I would focus on health companies that have exposure to vaccines or auxiliary treatments for COVID-19.

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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. and ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Next Science Ltd (ASX: NXS) share price was out of form in FY 2020 and fell a disappointing 70%.

But thankfully for its shareholders, it has started FY 2021 with a bang.

In afternoon trade on Wednesday the medical technology company’s shares are up 6.5% to $1.33.

Why is the Next Science share price zooming higher?

Investors have been buying Next Science’s shares after the release of an update on its Bactisure Surgical Lavage product.

The Bactisure Surgical Lavage product was specifically designed to remove structurally resistant forms of bacteria (biofilm) through the physical deconstruction of the extracellular polymeric substance (EPS) matrix. This makes bacteria more susceptible to traditional antibiotics and the body’s normal defence mechanisms.

It is used to remove debris, including microorganisms, from wounds using pulse lavage. This clear, colourless, low-odour solution has received FDA 510(k) clearance in the United States and CE Mark approval in Europe.

A clinical trial across seven sites in the United States on Infected Total Knee joint replacements found that there was a profound reduction in the recoverable bacteria after the application of the Bactisure. In fact, there were only 10% of individuals bearing a new or continuing infection at the end of the 90 day observation period.

What did Next Science announce?

This morning Next Science announced that Bactisure Surgical Lavage has been cleared by the Therapeutic Goods Administration (TGA) for sale in Australia.

This approval means that the product will now be sold in Australia by Zimmer Biomet. It is a leading orthopaedic implant supplier and Next Science’s appointed global distributor for the product.

The company’s Managing Director, Judith Mitchell, appeared to be very pleased with the news.

She said; “We are thrilled that we can now offer our technology to Australian surgeons to help them manage their patients in eliminating surgical site infections.”

More reading

• These 3 ASX healthcare shares are at all-time highs!
• Alcidion Group share price jumps 10% on new contract
• Top brokers name 3 ASX 200 shares to buy today
• Scentre Group’s share price is up almost 6% today
• Star Entertainment Group shares lift with news of reopenings

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Alcidion Group Ltd (ASX: ALC) share price has jumped 10.35% to 16 cents per share.

This comes after the company announced a new contract with Sydney Local Health District (Sydney LHD) for the implementation of its Miya Precision platform. The technology will be used to assist in the delivery of virtual health care. 

What did Alcidion announce?

The Miya Precision platform will be used to virtually treat patients that have tested positive to COVID-19. This limits the risk to staff while also reducing the need for personal protective equipment. It will allow staff to monitor and communicate with patients remotely while they are in home isolation. The contract will be in place for an initial 12 month period and is valued at $560,000. 

Sydney LHD has around 12,000 staff and is responsible for the health of more than 700,000 people. It operates Prince Alfred and Concord Hospitals, as well as its virtual hospital, rpavirtual.

The announcement stated; 

“While rpavirtual is currently focused on supporting Sydney LHD’s response to the COVID-19 outbreak, after the current emergency situation passes, this innovative model of care will revert to providing essential monitoring of selected patients with chronic conditions from community facilities or their homes. This is part of a world wide trend towards using virtual care to improve patient outcomes and experience while reducing pressure on hospital facilities.”

The contract will allow the health service to integrate their devices along with electronic medical records in their rpavirtual hospital for a period of 12 months. 

Alcidion Managing Director, Kate Quirke stated; “We are delighted to enter this partnership with Sydney LHD. We have moved quickly to enable an initial rollout that addresses the short term challenges raised by COVID-19. This engagement allows us to demonstrate the value of our platform in one of the busiest hospitals in Australia.”

About the Alcidion Group share price

Alcidion develops and licenses 3 core healthcare software products: Miya Precision, Patientrack and Smartpage. It also resells other healthcare software products in Australia, New Zealand and the United Kingdom (UK).

In April, Alcidion released its Q3 FY2020 business update citing a solid performance amidst COVID-19 pandemic.

The company reported that at 31 March 2020, sold revenue to be recognised in FY2020 was $17.2 million, exceeding the total FY2019 full year revenue of $16.9M. Of this sold revenue, $10 million was recurring revenue, representing a 37% increase on Q3 FY2019.

Since the start of January, Alcidion reports that it has signed several significant new contracts, including;

• Townsville Hospital and Health Service contract to implement Smartpage;
• The implementation of a data warehouse across all Calvary Health Care sites;
• Systems integration contract for national Digital Pregnancy Health Record pilot; and
• Murrumbidgee LHD to expand and extend use of Miya Precision and Miya MEMRe.

Last month, Alcidion Group Limited was added to the All Ordinaries (INDEXASX: XAO) and has a market capitalisation of around $158 million. 

The Alcidion Group share price is up 65% from its 52 week low of $0.097 cents. It has dropped 13.5% since the beginning of January. However, the Alcidion share price has increased by 23% since this time last year.

More reading

• 3 exciting small cap ASX shares to watch very closely

Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Collins Foods Ltd (ASX: CKF)

According to a note out of Morgans, its analysts have retained their add rating and lifted their price target on this quick service restaurant operator’s shares to $10.23. The broker made the move after Collins Foods delivered a stronger than expected FY 2020 full year result this week. Morgans was also pleased with the KFC Australia business’ strong start to FY 2021 and the Taco Bell business rebounding close to pre-COVID 19 levels. I agree with Morgans and feel Collins Foods would be a good long term option.

Jumbo Interactive Ltd (ASX: JIN)

Analysts at Morgan Stanley have retained their overweight rating but lowered their price target on this lottery ticket seller’s shares to $12.50. According to the note, although Jumbo has signed a new long term reseller agreement with Tabcorp Holdings Limited (ASX: TAH) on less favourable terms, it still sees value in its shares and growth opportunities for its SaaS business. Furthermore, despite the less than favourable terms, Morgan Stanley believes Jumbo can deliver strong earnings growth over the coming years. I agree with the broker on this one. Although this agreement is disappointing, it does remove the risk of Tabcorp pulling the plug on their relationship in the near future.  

Qantas Airways Limited (ASX: QAN)

A note out of the Macquarie equities desk reveals that its analysts have resumed coverage on this airline operator’s shares with an outperform rating and $4.35 price target. According to the note, the broker believes that Qantas’ recovery plan and cost reductions will lead to it becoming a more profitable airline in the future. Though, given the current state of travel markets, a return to profit could take until FY 2023. If everything goes to plan with Qantas’ recovery, I think it could prove to be a good investment.

More reading

• ASX 200 rises 1.4%, Collins Foods delivers tasty returns
• Top brokers name the latest ASX shares to buy today
• What does the future hold for the Qantas share price?
• Leading brokers name 3 ASX 200 shares to sell today
• ASX 200 up 1.2%: Big four banks rebound, WiseTech CEO dumps shares, Collins Foods impresses

James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia has recommended Collins Foods Limited and Jumbo Interactive Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Scentre Group (ASX: SCG) has not received a lot of love in FY20 with the share price down 41.96% in the past 12 months. However, the share price has surged 5.99% today at the time of writing.

Retail stores are re-opening and customer visitations improving. Does it have a positive outlook?

Retail stores reopening and customer visitations improving

In a news publication released on its website yesterday, the group announced customer visitations have increased as stores re-open, illustrated by the table below:

	May 2020 customer update	June 2020 customer update
% of retail stores open Australia	80%	92%
% of retail stores open NZ	93%	94%
% customer visitations for week ending 24 May 2020 (of the previous year)	80%	86%

As can be seen above, retail stores are re-opening and customers are coming back to shopping centres. In Australia, 92% of retail stores are open in June 2020 compared to 80% in the May update. Additionally, in New Zealand, there has been an increase of 1% in retail stores open. Across the group, customer visitations are up 6% in June compared to May.

Scentre Group director of customer experience, Phil McAveety said, “the immediate uplift in customer visitation reflects our desire as social beings to engage with friends and family and experience products and services in person.”

There is a shift in spending in line with the easing of restrictions and there is the expectation of a recovery in the businesses most impacted. An online and physical presence is complimentary to businesses.

Outlook

Retail sales increased 16.3% in May 2020 representing a significant rebound in the industry compared to April as restrictions have been eased across Australia. While it may be too early to be optimistic as the gains experienced in May is a rebound from the 17.7% fall in April, the positive customer visitations and the number of retail stores opening is heading in the right direction.

However, consumer confidence has declined according to ANZ-Roy Morgan. There is a risk this could impact the foot traffic in shopping centres over the coming months.

Foolish takeaway

Scentre Group has shopping centres all around the country. The geographic diversification could help it withstand the second wave that is being experienced in Victoria right now. However, the fall in consumer confidence could impact the increase in customers returning to the group’s shopping centres.

Personally, I would like to see more of a prolonged recovery in the retail industry before adding to my position in Scentre Group. 

More reading

• 3 ASX share price trends to watch next week
• Why the Scentre share price could rise 88% in 2020
• Here are 3 ASX 200 shares with dividend yields over 8%
• Here are 3 Australian share market trends to watch this week
• ASX share price winners and losers of last week

Motley Fool contributor Matthew Donald owns shares of Scentre Group. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Star Entertainment Group Ltd (ASX: SGR) share price lifted marginally today at 4% as the casino operator provided an update on its properties reopening. The Star Sydney reopened on 1 June on a restricted basis. From 1 July, the Sydney premises will see further restrictions lifted with 3 July seeing The Star Gold Coast and Treasury Brisbane’s gaming facilities reopen.

Next stage of The Star Sydney reopening

Under the next stage of the reopening, The Star Sydney will be able to host up to 5,000 patrons. Providing a 1.5-metre distance between individuals, all electronic gaming machines and table games will become operational. Spatial distancing and capacity limits will likely constrain visitation and revenue during the peak times of Friday and Saturday nights.

The Star Sydney trading performance improved over June with average spend per visit materially higher than 1H FY20. Nonetheless, given operating restrictions, performance was significantly below normal levels.

Queensland reopenings

The Star Gold Coast and Treasury Brisbane’s main gaming floors and private gaming rooms will reopen on 3 July 2020.

The maximum gaming area patron number will be roughly 2,600 for The Star Gold Coast and 2,300 at Treasury Brisbane aligning with the 4 square metres per patron rule.

Casino operators hit hard by COVID-19

Both Star Entertainment Group and Crown Resorts Ltd (ASX: CWN) were ‘non-essential businesses’ and were forced to close during lockdown. Subject to strict capacity and distancing requirements, properties have gradually reopened. Crown recommenced operations of its Perth casino from 27 June as COVID-19 restrictions were eased in Western Australia.

The closures caused by the coronavirus crisis significantly impacted the casino operators’ share prices. Star Entertainment Group’s share price is 40% below its 2020 high with Crown 24% below its high.

From 1 July 2019 to 23 March 2020 when gaming and non-essential services ceased, Crown’s net profit after tax (NPAT) was $210 million. But both casino operators faced a precipitous drop in revenue during 4Q FY20 which will be reflected in its full-year results.

Foolish takeaway

The casinos resuming operations, even on a limited basis, will see shareholders relieved. Nonetheless, extended closures will have a significant impact on FY20 revenues and profits.

More reading

• ABS reveals which industries (and ASX shares) may rebound hard after COVID-19
• Share price winners and losers of the pandemic
• These 5 ASX shares saw the biggest losses last week
• Why Air NZ, Carsales, Pendal, & Star shares are dropping lower
• Next phase of bull market could see ANZ Bank outperform Afterpay

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Westpac Banking Corp (ASX: WBC) share price has started financial year 2021 on a positive note and is pushing higher on Wednesday.

At the time of writing the banking giant’s shares are up 1% to $18.11.

Why is the Westpac share price pushing higher?

Investors have been buying Westpac’s shares after it was the subject of a positive broker note out of Goldman Sachs.

According to the note, the broker has upgraded the bank’s shares to a buy rating with a $20.13 price target.

This price target implies potential upside of 11.5% for its shares over next 12 months excluding dividends. This increases to almost 18% if you include the $1.12 per share fully franked dividend that Goldman Sachs expects the bank to pay in FY 2021.

Why did Goldman Sachs upgrade Westpac’s shares?

Goldman has been looking at the loan deferrals which were introduced by the banks at the height of the pandemic. They were put in place to support homeowners and businesses during the crisis.

The majority of these deferrals were made for three months, with an option to extend them for a further three months.

Given how there are $236 billion of loans on repayment deferrals (8% of total credit), the performance of these loans will have a big say on sector earnings, capital requirements, and ultimately the share prices of the big four banks over the next 12 months.

The good news is that Goldman Sachs has been doing some bottom up analysis and believes the provisioning done by the banks could be adequate. This is particularly the case with Westpac, which it feels is best placed to deal with the end of the deferral period.

Goldman explained: “While the nature of the analysis, particularly in relation to SME deferrals, makes stock-based conclusions difficult to reach, with a relatively conservative mortgage LVR profile, and lower estimated number of SME loans on deferral (c.17% of total major bank SME deferrals), we think WBC looks relatively well-placed to deal with the end of the deferral period.”

“Coupled with the fact that: i) it should be exposed to improving industry NIM trends, and ii) it is trading ~2/3 standard deviations cheap vs. peers on EPS/PPOP multiples respectively, we upgrade it to Buy,” the broker added.

Should you invest?

I agree with Goldman Sachs and would be a buyer of Westpac’s shares at the current level. Especially if I were an income investor. The broker’s forecast $1.12 per share FY 2021 dividend represents a very attractive fully franked 6.2% yield.

More reading

• ASX 200 up 0.9%: Big four banks rising, NEXTDC rockets higher
• 5 things to watch on the ASX 200 on Wednesday
• Morgans picks the best FY21 ASX buys for the COVID-19 world
• ASX bank shares have experienced a horrible financial year
• ASX 200 up 1.2%: Big four banks rebound, WiseTech CEO dumps shares, Collins Foods impresses

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Despite being down 21.1% in the March quarter, some of the companies within the Deloitte Australian CleanTech Index – which comprises 92 ASX cleantech shares across 5 sub-sectors – now look primed to rebound from the pandemic-induced disruption.

Here are 3 ASX cleantech large-cap shares that have been regaining lost ground since the share market sell-off in late February.

Reece Ltd (ASX: REH)

The share price of this plumbing and bathroom product supplier across Australia, NZ and the US dropped from a high of $11.90 on 21 February to a 23 March low of $7.87. The Reece share price has since bounced back up to $9.10.

Given the fundamentals on this stock have not changed, I believe it’s well placed to benefit from both measures to reignite the Australian economy, including the federal government’s $688 million HomeBuilder/renovation scheme, and future growth in its recently acquired US plumbing distribution business, Morsco Inc.

As a vote of confidence in the stock, Reece recently tapped the market in a $600 million capital raise, plus an attractively priced retail entitlement offer, which will increase liquidity, reduce net debt and help capitalise on new opportunities, which may include further acquisitions in the US. The company indicated the measures would increase its total liquidity position to $917 million.

While it’s unlikely, the $917 million Reece now has available could be drawn on if future outbreaks of coronavirus forces shutdowns of its Australian and US outlets, which (unlike NZ) have managed to stay open given their classification as essential services. These funds also position Reece to ride out any entrenched downturn locally, or if the US downturn ends up being a more protracted affair.

I think the stock’s clear market dominance remains a major plus going forward, with future upside coming from further expansion into the US, and ongoing technology investment. The stock trades on a forward price-to-earnings (P/E) ratio of 25x. In my opinion, a share price sub-$9.25 makes for a reasonable entry point for long-term investors.

Cleanaway Waste Management Ltd (ASX: CWY)

As a provider of waste management services, Cleanaway has performed well throughout the coronavirus crisis. Due to Cleanaway’s defensive core earnings stream, the share price (which is currently 13% down on its 52-week high of $2.53) managed to avoid the brunt of the sell-off experienced by the market at large.

With municipal waste management representing up to 55% of total earnings before interest, tax, depreciation and amortisation (EBITDA), Cleanaway looks well placed to handle its debt position, in my view. I think the stock looks equally well placed to capitalise on Australia’s desire to become increasingly waste self-sufficient.

With its Footprint 2025 strategy seeing the company investing in a sustainable value chain, Cleanaway also appears to be well positioned to make further forays into recycling and alternative waste processing. I think this will help to consolidate the company’s market dominance and this bodes well for improved margin growth. In my opinion, a share price of under $2.00 would make for a buying opportunity.

Bingo Industries Ltd (ASX: BIN)

Like Cleanaway, Bingo’s strong fundamentals in recycling and waste management solutions positioned it well to ride out the worst of the COVID-19 downturn and emerge remarkably unscathed. Bingo shares were heavily sold-off along with the broader market, going from a high of $3.20 on 19 February to a low of $1.82 virtually a month later. However, it has since bounced to $2.19, which puts it on a 10% discount to Morningstar’s fair value of $2.45.

I’m particularly impressed by Bingo’s financial performance in Q3 FY20, which (unlike so many shares) is on track to deliver its stated market guidance, pre-COVID-19. Bingo’s cash preservation focus and strong balance sheet means it’s well positioned to capitalise on the closure of any of its smaller unlisted competitors, which may have limited access to the capital needed to successfully weather the pandemic.

In addition, the recent approval to increase its total landfill limit from 700,000 tonnes to 1 million tonnes annually allows it to increase its operating hours, which signals a major revenue opportunity for Bingo going forward.

More reading

• Can you clean up by investing in ASX waste management shares for the long-term?
• Why I’m desperate to add CSL and 2 other ASX shares to my portfolio in 2020
• Top fund manager reveals some of the best ASX shares to own
• Can this ASX dividend share afford its 11% yield?
• EML Payments and these ASX mid cap shares could be destined for big things

Motley Fool contributor Mark Story has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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