Sonic Healthcare delivered 1H18 revenues of $2.7 billon, which was up about 8% versus last year.
Group EBITDA margin missed forecasts and therefore, at 21 x forward earnings and only a 3.4% dividend yield, we view SHL as full value.
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The stock was removed from our ASX 50 model a few weeks back when the Algo Engine triggered a sell signal.
Investors looking for cashflow should look to buy SHL on a pullback below $23 and then sell $24 December call options; whilst remaining exposed to the Mar and Sep dividends along with collecting the added option premium.
This strategy delivers 12% cash flow on an annualized basis.
Sonic Healthcare
