Healthcare stocks are great to own through investment cycles.
Given that most people are unlikely to compromise on healthcare spending under even the direst financial conditions, their profits are usually quite defensive.
In addition, many companies with innovative products or services also have the added benefit of long-term growth opportunities.
Whilst a great many of the best biotechnology, healthcare and pharmaceutical companies lie outside Australia, there's a number of very successful local companies which ASX investors should know about.
Here's five of the best.
- Cochlear Limited (ASX: COH) is a renowned manufacturer of implantable hearing devices used by individuals the world over. Cochlear's origins stretch back to the 1960's when Dr Graeme Clark began researching his idea of an electronic implantable hearing device. With the ongoing uptake and advancement of biotechnology, Cochlear's best days likely lay ahead.
- Sonic Healthcare Limited (ASX: SHL) is a leading medical diagnostic services company with operations from Australian to Europe to the USA. Sonics sheer size and expertise across many jurisdictions affords it an enduring advantage over competitors. Since 1993, when it produced just $25 million in revenue, it has grown into a 28,000-strong employer generating revenue in excess of $2 billion during the most recent half-year.
- CSL Limited (AX: CSL), the $44 billion biopharmaceutical giant, operates in 27 countries providing vaccines, blood plasma products and a range of associated services. With leading positions in both industries, CSL has a competitive advantage many of its rivals would only dream of. Despite its share price climbing almost 2,000% in the past 15 years, analysts continue to forecast strong profit growth in the years ahead.
- ResMed Inc. (CHESS) (ASX: RMD) is a leading dual-listed biotechnology device manufacturer for sufferers of sleep apnoea and related respiratory disorders. The market for ResMed's products continues to grow as more people recognise the benefits of a healthy night's sleep and its association with other symptoms.
- Virtus Health Ltd (ASX: VRT) is a much smaller company than the four aforementioned. The $500 million healthcare company is engaged in the provision of in vitro fertilisation (IVF) and related services throughout Australia and, more recently, Ireland. The group has not been listed on the Australian Securities Exchange for long but is off to encouraging start, with its shares rising 18% since mid-2013.
Should you buy these shares today?
If you're investing for the long-term (10 years or more) then each of these five companies should be on your watchlist, at least. While each of them may have performed strongly in recent years, if you're prepared to buy and hold through the markets ups and downs, it could be worth starting a position in one or two of your favourites, right now.
