A professional investor tells us where he'd put his money. This week: Andy Headley of Alliance Trust and Veritas Asset Management chooses three favourites.
Government rhetoric and policy have emerged as key issues that could affect companies over the coming years. Heated discussions among regulators and politicians in sectors such as technology and healthcare, and the policies that emerge as a result, could enforce real change. In US healthcare, for instance, political efforts to lower drug prices are not only hitting companies in the pharmaceutical sector but are also the driving force behind widespread changes further down the supply chain.
These supply-chain companies, however, should ultimately be able to fend off political upheaval and continue to benefit from the vital role they play in the provision of medicine. They are also engaging in mergers and acquisitions, which enable them to diversify into different areas of the healthcare system. They are currently cheap relative to the market, and once the issues are resolved they promise to play a fundamental role in helping provide a solution to the problems in US healthcare.
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A pharmacy giant
CVS Health Corporation (NYSE: CVS)
Cigna set for success
Cigna (NYSE: CI)
Technology titan has room to grow
Microsoft's (Nasdaq: MSFT)
The plan has involved a commitment to be more open as a company, to invest more in the cloud (online data centres)and to move to a subscription model, whereby customers typically pay a monthly fee for the group's offerings. The refreshed direction is beginning to boost cash flow, even though it was only implemented four years ago, and bodes well for the years ahead.
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