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3 small cap healthcare shares to bring your portfolio to life

I think that the healthcare sector is home to a number of small cap shares with significant long-term growth potential.

Three which I think investors ought to consider snapping up today are listed below. Here’s why I’m bullish on them:

Nanosonics Ltd. (ASX: NAN)

The shares of this infection control specialist have fallen sharply since the release of its half-year results last week. While the headline numbers made it appear like the company had a terrible half, once you dig deeper you’ll see that it wasn’t as bad as it looked and that there’s reason to be very optimistic on its future. During the half the installed base of its trophon EPR product in North America increased by a solid 14% to 14,100 units. Despite this strong growth, Nanosonics still only holds a small share of the total addressable market. But considering its product is regarded as the best in its class, I think it will continue to win market share over the coming years.

Volpara Health Technologies Ltd (ASX: VHT)

Another top small cap healthcare share which I think has enormous growth potential is Volpara Health Technologies. The company’s impressive piece of technology allows personalised, high-quality breast cancer screening based on automated, objective measurements of breast density, compression and radiation dose. Demand for the technology has unsurprisingly been growing strongly, putting management on course to exceed its target of 200% growth in annual recurring revenues in FY 2018.

Zenitas Healthcare Ltd (ASX: ZNT)

Earlier this week this growing home care and health services company released its half-year results to the market. For the six months ended December 31, Zenitas achieved pro forma net revenue of $34.8 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $5 million. This was a 53% and 51.5% increase, respectively, on the prior corresponding period. Pleasingly, the company’s top line was a combination of acquisitive growth and organic growth. With the latter coming in at 7.5% during the period. I’m bullish on its future due to the opportunities for further growth through acquisitions and favourable reforms in the sector that aim to push the burden of healthcare services from hospitals into primary care providers such as Zenitas.

I'm also bullish on these three tech shares at the moment. I expect them to provide market-beating returns in 2018.

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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. The Motley Fool Australia owns shares of VOLPARA FPO NZ. The Motley Fool Australia has recommended Zenitas Healthcare Ltd. 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 Scott Phillips.

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