Ramsay Health Care, Auckland Airport among Morningstar's 'best ideas'
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The news: Morningstar has highlighted Ramsey Health Care and Auckland Airport as two of its 'best stock ideas' despite both stocks struggling due to operating cost concerns in recent months.
The numbers: Ramsay shares were up 0.2% to $33.62 at 3pm AEST. Auckland Airport shares were up 1.9% to $7.04.
The context: Morningstar equity market strategist Lochlan Halloway said the "common thread" with both companies is about costs.
For Ramsay, the market is worried that operating expenses have permanently reset higher. For Auckland Airport, the fear is that a "wave of capital expenditure will crush returns", he said.
While these issues weigh on sentiment and "won't resolve overnight", Halloway believes both companies have a "credible path to improvement — one the market appears to have written off."
What they said: "We’ve been positive on both names for some time, though each has struggled to win over investors," Halloway said.
"Auckland Airport’s shares have basically gone nowhere in five years, and Ramsay has been punished, the stock almost halving since late 2020."
The source: Morningstar research
