Healthscope, and how to spot a salmon

Healthscope is starting to make us uneasy. Here we examine the bull and bear case for owning the stock.

Booms, busts, fashions and fads have been part of the investing landscape almost since the beginning. Today it’s all about dividend yields, ‘Trumponomics’, and a second wave of dot-com bubble hysteria. When it comes to the healthcare industry, few stocks have as much glam as Australia’s two largest hospital operators, Healthscope and Ramsay Health Care – and there are plenty of good reasons for that, which we’ll get to in a moment.

Healthscope’s share price, however, has fallen around 30% since the company warned of slowing volume growth in October. Is this an opportunity or a time for caution?

Strong tailwinds from pipeline

Debt, cash flow, CEO add risk

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