Fisher & Paykel Healthcare is a leading designer, manufacturer and marketer of products and systems for use in respiratory care, acute and chronic respiratory care, surgery and the treatment of obstructive sleep apnea
On Friday (30/4/2021), ResMed (a competitor to Fisher Paykel Healthcare) announced in their 3Q Press Release that they have had a decrease in demand for masks and ventilators in Europe, Asia and other markets.
This might be worth considering if you are in the market for either ResMed or Fisher Paykel Healthcare stocks.
I’ve been stocking up on some Fisher Paykel Healthcare (NZX.FPH) shares over the past few days, so I thought I’d update my pie chart to get a visual representation of my portfolio as it has previously proved useful to me.
The chart isn’t as useful to me as it has previously been because I’m not so fussed about having a balanced portfolio at this stage. This year is mainly about accumulating growth stocks (particularly those growing this year) so I can get as much of a discount as possible to next year’s prices, in preparation of selling up some angel investments to enable my retirement by the end of next financial year.
My case for investing in FPH is because it’s a long term growth stock, which means that even if it falls after proliferation of COVID vaccines, it should recover the position within a few years. However, it’s my believe that this perpetually expensive stock is likely to surprise on the up-side. The reason for this is that the last guidance provided made some conservative assumptions, and the COVID situation has got worse since that guidance was released. Additionally, my research suggests that vaccine deliveries are not happening very quickly when the global population is concerned. I suspect that COVID will be around a long time to come, so FPH is a good bet.
I feel happy to be overweight in FPH and SUM (because of the way the residential property market is going), but am disappointed that I didn’t buy more EBO shares back when I had identified them as good value.
Given all that’s going on, I’ve been thinking about what’s the best way to invest. I noticed in my portfolio that there are some shares that benefit from the Coronavirus situation, and some that would benefit if it went away. Since enough time has passed that companies have released announcements covering periods operating under Coronavirus, it’s fair to say that companies that are coping under Coronavirus have had their share price correctly revalued with respect to this, and that being rid of Coronavirus would would only sent their value upwards.
Therefore putting a bob each way, or hedging an investment in a company that’s benefiting from Coronavirus with an investment in one that would benefit from its riddance could prove a good investment under all scenarios. So I thought it might be fun to make a list of pairs of stocks could collectively be good investments.
ATM & FPH
This is an obvious one. FPH has been selling humidifiers (which improve the performance of ventilators – required by Coronavirus patients) faster than they can make them and the share price looks like it could double under another year of Coronavirus. In the event of Coronavirus being eradicated, FPH may return to their normal growth trajectory (15% pa), though there’s a risk of dropping back closer to pre-Coronavirus levels if new buyers of humidifiers fail to see value / demand in their continued use. That said, this wouldn’t be the worst thing if (like me) you see FPH as a bond proxy and don’t mind the 1% dividend in a solid company.
ATM has recently had their share price ravaged as the lack of Chinese people (tourists, students, etc.) travelling from Australia caused the Diagou market to dry up. A cure in Australia & China could see the ATM share price double within a year. It has to be said that there is also downside risk from the current Australian-Chinese relationship.
ATM & DGL
Speaking of the current poor relationship between Australia and China, I think ATM & DGL could be another good pair for my list. If China bans Australian wine imports, this could be good for DGL who export a lot of their wine to China and might enjoy a lack of competition in the australasian arena.
I had thought that DGL exported a lot of wine to China because I remembered reading that on a share forum. Upon investigation, it seems that only 22% of their products are sold to Asia/Pacifica.
What other pairs can you think of?