IN THE BACK
STOCKS
HEALTHY,
WEALTHY
WISE
James Thomson, manager of the Rathbone Global
Opportunities fund, reveals the stocks he is using in
his portfolio to play the growing theme of healthcare
T
he past 15 years have been humiliating for the
pharmaceutical industry, so we have never invested in a
single company. But the investment case for pharmaceuticals
and, more generally, healthcare, has changed dramatically
following the mapping of the human genome and pressures
caused by a population that is living longer. Here are three
healthcare stocks in particular that have caught my attention.
BEFORE THE MAPPING OF THE
HUMAN GENOME almost 15 years
ago, few of our bodies’ proteins or
genes were understood. It has
taken time, but scientists are now
using this breakthrough to unleash
a wave of innovation in drug
development. This should lead to
an improvement in treatments,
pricing power for pharmaceuticals
and accelerating growth. These
include the possibility of a cure for
Hepatitis C, a first treatment for
Alzheimer’s disease, and, for
Amgen, a game-changing super
statin that reduces dangerous
cholesterol by up to 75 per cent.
More breakthrough drugs are also
approaching approval.
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DESPITE THE RHETORIC
AROUND THE PRIVATISATION
of the NHS, with an ageing
population, lengthening waiting
times and increasing patient
frustration, private medical
treatment will increase. Spire takes
some of the overflow from the
NHS, offers treatment to those with
private medical insurance and,
most profitably, takes patients who
self-pay. Employers are expected
to be more generous with private
cover as they want their employees
to be healthy. As demand for
elective procedures increases with
waiting times in the NHS, many
patients are using savings to pay for
speed and flexibility.
SO NOW THE END IS HERE…
IF YOU LIVE IN THE UK,
there is more than a 10 per cent
chance that your funeral will be
conducted by Dignity, the UK’s
largest and only listed operator
of funeral homes and crematoria.
This is no flashy dotcom – it
is a simple business, run by
experienced management, who
understand how to generate
a long-term, healthy return,
irrespective of the global economy.
With a steady death rate, sensible
acquisitions, modest price
increases, and cheap debt-funding,
Dignity has averaged comfortable
double-digit growth in earnings
per share over the past five years.
trustnet.com