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BB Healthcare Trust PLC

BB Healthcare Trust sees healthcare sector demand rising for 'many decades to come'

Snapshot

The trust thinks valuations “look very attractive” in a number of healthcare sub-sectors that it invests in following a recent sell-off

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Quick facts: BB Healthcare Trust PLC

Price: £1.27

Market: LSE
Market Cap: £532.85 m
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  • High conviction, long-only investment trust focused on healthcare stocks

  • Ageing population to support 'sustained structural demand growth' 

  • Fund taking advantage of opportunities created by recent pull-back in equities 

 

What BB Healthcare Trust does:

BB Healthcare Trust is an investment trust focused on global healthcare equities. It is run by the management team behind the hugely successful BB Biotech Investment Trust.

The fund has a cap of 35 companies in which it can invest at any one time and while it takes stakes in specific businesses, it does so to garner exposure to investment themes that are rigorously assessed to drive innovation and value.

Top 10 holdings:

The trust’s top 10 holdings as of December 31 last year were Align Technology, Illumina, Teladoc, Anthem, Celgene Corp, Lonza, Bristol Myers Squibb, Intuitive Surgical, Esperion and Ionis.

Inflection points:

  • First half share price and NAV brought in total returns in sterling terms of 4.0% and 7.5%, respectively. In comparison, the MSCI World Healthcare Index (in sterling terms) delivered a total return of 1.7%.
  •  The target for future dividends has been set at 3.5% of net asset value. The firm intends to pay a final dividend of 2p for the 2018 financial year after paying an interim dividend of 2p. For 2019, it expects to pay a total dividend of 4.85p.
  • The group has been raising money in recent months to take advantage of the opportunities created by a recent pull-back in healthcare stocks. The extra cash should also improve the liquidity of its stock as well as the company’s marketability, BB Healthcare has said.

Blue sky:

BB Healthcare thinks valuations “look very attractive” in a number of healthcare sub-sectors that it invests in following a recent sell-off. Healthcare stocks have fallen recently in response to concerns about US-China trade tensions, Brexit and political instability in Europe.

Despite the correction, the trust has told investors to be patient as it believes the healthcare sector will remain an area of “sustained structural demand growth for many decades to come”, supported by an ageing population.

“Recent trading has been very challenging, driven by macro factors that we see as being of little concern to the company's strategy,” said chairman Justin Stebbing.

“As such, we feel current market conditions offer a compelling opportunity to deploy additional capital, which will broaden the investor base and improve marketability.”

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