Sell alert! Why this expert is calling time on Magellan and Ramsay Health Care shares

Magellan Financial Group Ltd (ASX: MFG) and Ramsay Health Care Ltd (ASX: RHC) shares have both outpaced the S&P/ASX 200 Index (ASX: XJO) since June.

In afternoon trade on Wednesday, Magellan shares are up 3.1%, changing hands for $10.38 apiece. That sees shares in the ASX 200 funds manager up 21.2% since market close on 1 June, well ahead of the 5.3% gains posted by the benchmark index over this same time.

Ramsay Health Care shares are heading the other way today, down 0.7% at $43.64 each. That leaves shares in the ASX 200 healthcare stock up 19.5% since 1 June.

Looking ahead, however, Catapult Wealth's Dylan Evans forecasts growing headwinds for both ASX 200 stocks (courtesy of The Bull).

Here's why.

Why Ramsay Health Care shares could struggle into 2027

"Ramsay owns and manages private hospitals in Australia, the UK and Europe," Evans said. "The company benefits from an ageing population driving spending on health care."

As for the mounting headwinds facing Ramsay Health Care shares, he noted:

But cost of living and inflationary pressures contribute to higher labour costs for RHC. Also, stretched government budgets put pressure on health care spending. Consequently, margins may be pressured over time as governments offer lower contributions and less than inflation levels of indexation.

And following a strong year of outperformance, Evans issued a sell recommendation on the ASX 200 healthcare stock.

"The shares have risen from $34.59 on January 2 to trade at $44.04 on July 30. Investors may want to consider cashing in some gains," he said.

Which brings us to…

Should I sell Magellan shares today?

Atop his bearish outlook on Ramsay Health Care shares, Evans also issued a sell recommendation on Magellan shares.

"Magellan is an active Australian fund manager that invests in global equities," he said.

Commenting on the company's long-term underperformance, he noted, "On August 9, 2021, the shares were priced at $51.40. The stock was trading at $9.54 on July 30, 2026."

Even factoring in the recent share price lift to $10.38, that still represents a painful 79.8% plunge.

Summarising his sell recommendation on Magellan shares, Evans concluded:

Magellan has been undergoing significant change and faced considerable internal instability during the past four years. Staff turnover, comparably high investment management fees and an underperforming investment portfolio contributed to fund outflows.

Statutory profit of $68.9 million in the first half of financial year 2026 was down 27% on the prior corresponding period. Other diversified financial stocks appeal more in these challenging and volatile times.

The post Sell alert! Why this expert is calling time on Magellan and Ramsay Health Care shares appeared first on The Motley Fool Australia.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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