There is little doubt that Ramsay Health Care (RHC) is one of Australia’s best companies. By share price performance, probably in the top 3, along with CSL and perhaps Commonwealth Bank or Macquarie. Have a look at this share price graph that covers the last decade.
So, when the stock suddenly falls 8.3% in price, after the company delivers on forecast with core profit up 12.8% for the first half, upgrades guidance for the rest of the year, and announces that its CEO intends to retire later in the year, this is what we call in the trade as a “buying opportunity”. And that is what happened on Thursday.
The retirement of Chris Rex, who has been CEO since 2008 and prior to that, Chief Operating Officer for 13 years, took the analysts by surprise and perhaps the Company could have done better in briefing the market. But as soon as the CEO tells you that he intends to go, this becomes a disclosable item and the Board had no choice but to advise the market.