The elective surgery stocks getting a boost from the easing of COVID-19 restrictions

Since restrictions on elective surgery were lifted, some stocks in the elective surgery space have seen windfalls that may cancel out the COVID-19 losses.

In late March, the Morrison government imposed restrictions on elective surgery to free up hospital beds and staff for an anticipated wave of COVID-19 cases.

But these restrictions only lasted a few weeks, before being eased in late April as Australia’s COVID-19 curve flattened.

A number of ASX stocks have risen since restrictions were lifted.

Dentists, pathologists winning

One stock that has benefited is dental stock Pacific Smiles (ASX:PSQ). It re-opened most of its dental centres on April 24 and this morning told shareholders it saw solid demand since then as patients rebooked.

It is expecting patient fees for the full financial year to be roughly in line with last year at $185.8m, which is just 0.7 per cent lower than the year before. Underlying earnings are anticipated to be $22.3m to $22.8m.

Pacific Smiles shares are up 36 per cent since April 24 and also for the entire financial year despite plunging in March.

However, the ASX’s other dental stocks are flat since COVID-19 began, including fellow franchisee 1300 Smiles (ASX:ONT) and equipment maker SDI (ASX:SDI).

The latter stock last updated the market in March, when it still anticipated a profit of between $3.5m and $4.5m. It did, however, warn shareholders it expected a 13 per cent drop in sales.

That is because the June quarter is typically the busiest quarter and restrictions in other global markets have eased more slowly.

As for other sectors, two top performers were pathology providers Healius (ASX:HLS) and Sonic Healthcare (ASX:SHL). Since April 24 these companies have gained 27 per cent and 24 per cent respectively.

The ones on life support

But not all stocks with a foot in the elective surgery industry have gained in the last two months.

One sector expected to benefit with elective surgeries back on the table was IVF, which was a sector flagged by the Morrison government as one of the first to be able to get back to work.

ASX players Virtus (ASX:VRT) and Monash IVF Group (ASX:MVF) both saw share price surges in April on the news. Both stocks have flatlined since, but regained some ground lost during the COVID-19 market crash.

It has been more of a mixed picture for medical imaging stocks.

Mach7 (ASX:M7T) has been a winner in the last two months, surging 88 per cent. On the other hand, Volpara (ASX:VHT) only gained 5 per cent and Micro-X (ASX:MX1) is down 4 per cent.

Arguably the catalyst for Mach7 was the acquisition of Client Outlook, which offers a diagnostic image viewing platform.

Mach7 raised $34.8m to snap it up three weeks ago. It told shareholders this would increase the company’s sales pipeline by 56 per cent and increase the customer install base by 150 per cent.