The health care sector has certainly created some fortunes. The founders of Ramsay Health Care Limited (ASX: RHC) and ResMed Inc. (CHESS) (ASX: RMD) made hundreds of millions of dollars thanks to the success of these global businesses. Meanwhile, long-term shareholders of companies such as CSL Limited (ASX: CSL) and Sirtex Medical Limited (ASX: SRX) have also enjoyed phenomenal returns – in the past decade $1 invested in each has grown to $6.50 and $8.30 respectively (excluding dividends).
One of the appealing attributes of investing in the health sector is that many of the businesses are operating within a growing industry. Another appealing attribute is that many also operate business models which enjoy wonderful leverage to higher sales revenue.
A review of companies in the health sector reveals a wide range of businesses from risky, high growth early stage pharmaceutical firms to highly profitable, stable and well regarded firms such as the four mentioned above.
One section of the health sector which may not immediately come to mind when considering the universe of opportunities is animal health, but given the 1,000% plus share price gain of the following stock it perhaps should do!
Greencross Limited (ASX: GXL) is a leading provider of veterinary services, thanks to its early moves to consolidate vet practices across Australia. In the past five years the stock's share price has rallied over 1,000% making it a top performing ASX stock.
An evolving trend both in Australia and across the Western world appears to be the demand of pet owners to improve the welfare of their beloved animals. This trend has led to many pharmaceutical companies scrambling to develop animal versions of human drugs. It is also apparent in the increased spend on small animals at vet practice services and increased retail spend on animal health products generally.
