Netcare’s stock has been trading at a bargain at R25-R27 below the average of R32.40 over the past 12 months. The group reported that adjusted headline earnings per share for the first half of its 2017 financial year were expected to be between 9% and 13% lower than the 91c reported for the first half of 2017.The healthcare sector, which is seen by investors as a defensive sector, has been plagued by a number of challenges, such as the cost of services and unpredictable regulation. The sector is most affected by lower medical aid subscriptions, which translate into fewer admissions. While Netcare said last week that patient numbers had declined, their hospital revenue had not been adversely affected as the cost of treatment per patient usually followed the inflation rate. Netcare operates the largest private-hospital networks in SA and the UK, with a market cap of just more than R38.57bn — and growing. More than 25% of South Africans are unemployed, which means private care is not a...
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