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Should you buy these popular healthcare shares?

With the global population ageing and chronic disease burden on the rise, demand for healthcare services is predicted to grow strongly over the next couple of decades.

Because of this, I think the healthcare sector a great place to look for buy and hold investments.

With that in mind, are these three healthcare shares in the buy zone today?

Cochlear Limited (ASX: COH)

This hearing solutions company’s shares may not be cheap, but I would argue that they are worth every cent. As the global population ages, I expect demand for hearing products will grow strongly and allow the company to continue its run of delivering above-average top and bottom line growth. This could make Cochlear a great buy and hold investment option today.

Nanosonics Ltd. (ASX: NAN)

I’m a big fan of this infection control specialist and believe it has a very bright future ahead of it. However, its recent half-year update was a touch weaker than I expected and short interest has rocketed since then. This has made it one of the most shorted shares on the Australian share market. Due to the success that short sellers have had over the last 12 months, this does make me nervous. As a result, I intend to sit this one out until there is a notable improvement in the company’s performance. After all, it does trade on a nosebleed valuation, meaning any underperformance could see its share price tumble notably lower.

Volpara Health Technologies Ltd (ASX: VHT)

Like Nanosonics, Volpara does trade at a significant premium to the market average. However, I believe that the growth Volpara has been exhibiting more than justifies this. The breast imaging analytics and analysis product provider has been growing its market share in the U.S. market at an impressive rate, leading to annual recurring revenues growing over 200% year-on-year in FY 2018. With management aiming to increase its market share from 3.2% to 9% by the end of FY 2019, I suspect next year could see similarly strong revenue growth.

I think Volpara has enormous long-term growth potential, but perhaps not quite as much as this next major investment boom.

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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 and VOLPARA FPO NZ. The Motley Fool Australia has recommended Cochlear 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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