Healthcare stocks have been one of the areas of the market I've been looking more closely at in the first half of the year. The sector is becoming bigger and more sophisticated by the month, it seems. Sadly for UK investors, many of the most interesting companies are listed in Germany, France and the US, but a handful of UK shares have popped up on my screens recently which are supported by solid metrics.
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#1. EMIS Group [LON:EMIS]
Easily the biggest out of the five stocks I'm looking at today, with a £866m market cap, EMIS provides healthcare software and systems for doctors. This includes integrated healthcare technology to national level healthcare sectors. The company has a good balance sheet, measuring up well against both UK and US peers in the space. The stock has been sold down in the last six months. EMIS agreed a £1.2bn takeover deal with UnitedHealth in March but stock sold off following concerns that the deal would be subject to scrutiny from the UK's Competition and Markets Authority. The CMA has potentially legitimate concerns around restrictions to patient data access. Full year results for 2022 came out in line with management expectations with a 4% increase in year on year revenues.
#2. Totally plc [LON:TLY]
Totally provides out of hospital healthcare services in the UK and Ireland, offering a range of treatments and advice for musculoskeletal injuries and conditions (e.g. physiotherapy and podiatry), primarily to NHS patients. It also manages referrals, urgent care services and occupational health schemes. Its portfolio of activities actually looks fairly diverse. It has a sector-beating income statement and a price to book ratio of 1.8. It looks as if management is being more prudent at the moment. Liabilities are also being kept under a degree of control. The shares have been gradually selling off over the last six months, with the market not liking the profit warning issued in March. The company told investors that strikes and workforce shortages had been disruptive and made managing costs in the UK healthcare sector tougher. We think it is starting to look over-sold - note that Totally just scored an insourcing contract with Ireland's Saolta University Health Care Group in April.
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