Why I think these healthcare shares are strong buys

Over the last five years the healthcare sector has arguably been one of the best areas of the market to invest.

During this time the S&P/ASX 200 Health Care (Index: ^AXHJ) (ASX: XHJ) has put on a gain of 112%, compared to the S&P/ASX 200’s 18.4% gain.

Whilst I wouldn’t necessarily expect the healthcare sector to replicate this gain over the next five years, I do think it has the potential to continue outperforming the index.

With that in mind, here are two top healthcare shares which I would suggest investors look at investing in:

CSL Limited (ASX: CSL)

Last week CSL once again turned in a half-year report ahead of expectations, causing its shares to race to a record-high. Despite its shares trading at these lofty levels, I still think the biotherapeutics company would be a great investment option today. Especially for investors willing to make a patient buy and hold investment. This is because I believe CSL is one of the highest quality businesses in Australia and capable of continuing its impressive growth in earnings for a long time to come thanks to its highly profitable core business and its fast-growing Seqirus influenza business.

Nanosonics Ltd. (ASX: NAN)

This leading infection control specialist is one of my favourite healthcare shares on the local share market. I have been very impressed at the level of growth in installed bases that its trophon EPR product has achieved over the last few years. But despite this rapid growth, the environmentally friendly ultrasound probe cleaner still only has a 12% share of the estimated global market. Considering it is regarded as being the best in its class, I expect it to continue to gobble up market share in the future. Nanosonics is due to release its half-year results later this week, so investors may want to keep their powder dry until then.

As well as CSL and Nanosonics, I think these blue chip shares are capable of outperforming the market over the next five years.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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