Share prices of top listed healthcare groups up 25% since October
The share prices of 14 of the top listed healthcare services groups have increased by 25% on average since the start of October, following a fall of 13% in the first three quarters of 2020. The best-performing shares are hospital and outpatient groups, whilst elderly care companies have done less well.
The only companies that decreased in value over this period are Mediclinic, which fell by slightly less than 1%, and Ramsay Health Care Limited, which fell by around 2.5%. The share prices of the remaining 12 companies all increased. Every single one of these companies saw a substantial portion of their share value wiped away in March 2020 when the first wave of Covid hit.
The best performing shares over the last eight months are Spire Healthcare, which more than doubled in value; Medicover, whose value increased by over 76%, and Apollo Hospitals, which saw a share price increase of 51%. The latter two didn’t suffer as much as other companies during the first three quarters of 2020; whilst both saw a drop in value when the first wave of Covid hit in March 2020, by the end of September they had both recovered and were trading above their pre-Covid peaks.
Spire Healthcare is the second-largest private hospital chain in the UK, with 39 hospitals, eight general clinics, including one oncology centre and one diagnostic centre with a total of 1,800 beds. Spire’s boost has largely been caused by a recent takeover bid from Ramsay. But investors had been bullish on it thanks to the UK’s strong vaccination program and opportunities to help the NHS clear its five million-strong waiting lists even before Ramsay’s offer. Medicover provides outpatient services in central and eastern Europe and Apollo Hospitals operates hospitals in India and Bangladesh.
Elderly care groups have fared particularly badly during the pandemic: Korian fell by 26% and Orpea fell by 16% in the first three quarters of 2020. But vaccination appears to have improved the outlook and allowed each to regain some of their lost share value since then; Korian is up by almost 11% and Orpea by just over 7.5%.
The overall outlook for healthcare services companies has improved substantially since the introduction of mass vaccination programs across the world.
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