Challenges set to continue for Regis Healthcare

During the last trading day shares of Regis Healthcare Limited (ASX:REG) fell by over 5% to $2.59, and have now dropped nearly 40% since the $4.20 high of 2018.

Is this trend set to continue?

2019 is set to be a challenge for the traditionally defensive healthcare sector, because of the federal election and a looming royal commission into aged care. These events are leaving little optimism for the 2019 outlook for investors.

Regis more specifically however, has successfully implement cost saving measures throughout the last year. Unfortunately these measures were not enough to offset increased wages, increased funding costs, and increased facility costs.

Whilst Regis is in a good position to benefit from Australia’s aging population, we think that regulatory changes will continue to put pressure on the business throughout this year. However, if you are looking for exposure to the healthcare sector, ResMed is worth looking at.

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