Bargain hunting amid the flight to safety

Healthcare stocks have been buffeted by uncertainty on many fronts, including the outlook for US drug pricing, broader macro concerns such as taxation policy, and a strengthening US Dollar.

This drove underperformance of healthcare vs the wider markets in H2 2016. Strong dispersion in sub-sector multiples ensued, with rotation out of “riskier” pharma/biotech into perceived safer havens such as lab tools and services players. 

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