In the aftermath of earnings season, markets often react strongly to short-term cost factors, sometimes ignoring long-term fundamentals. This creates opportunities for investors who are willing to look beyond the noise and focus on quality businesses with the ability to weather economic cycles.
Speaking with Juliette Saly on Ausbiz, Alvia’s Senior Investment Analyst, Daniel Martin, discussed why investors should target enduring franchises – businesses with strong barriers to entry, disciplined capital allocation, and the capacity to deliver consistent performance over time. According to Daniel, these businesses are better positioned to navigate the volatility seen in today’s market.
At Alvia, we continue to focus on healthcare as a core investment sector, recognising its defensive characteristics and earnings resilience. Ramsay Health Care (ASX:RHC), with its established presence across Australia, the UK, and the Nordics, is an example of a company that stands out to us. Strategic shifts within the company signal long-term growth potential, making it an attractive option. Daniel also highlighted the strengths of “the Ramsay of the US”, HCA Healthcare (NYSE:HCA), a company known for its disciplined capital management and ability to generate stable, long-term returns.
As Daniel puts it, short-term noise often leads to long-term opportunities, particularly in what we refer to as inexpensive defensive parts of the market. These businesses, while undervalued in the short term, offer strong prospects for sustained growth.