Thanks to technological advancements and the expected growth in demand for healthcare services over the next couple of decades, I think the healthcare sector is a great place to look for buy and hold investments.
This certainly is the case at the small end of the market where a number of companies are aiming to disrupt the status quo.
Three that I think have a lot of potential are listed below. Here’s why I like them:
Paragon Care Ltd (ASX: PGC)
Paragon Care is a provider of integrated services to the health and aged care markets. It has been on a shopping spree this year making no less than 10 acquisitions which are expected to be significantly accretive to earnings. The most recent acquisition was the NZ$54.4 million purchase of REM Systems in New Zealand. While there are integration risks that ought to be considered, if management successfully integrates these acquisitions then I believe Paragon Care will be positioned perfectly to deliver above-average growth for the foreseeable future.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara Health Technologies is a New Zealand-based company specialising in breast imaging analytics and analysis software. Its software is regulatory cleared, patent protected, clinically validated, and used in 36 countries. It recently released its first-quarter results which revealed further growth in its share of the U.S. market. At present 3.7% of all women screened in the United States are handled with its software. Management aims to grow its share to 9% by the end of the financial year. I expect this and its increasing revenue per screening will lead to further strong revenue growth this year. In FY 2018 annual recurring revenues rose an impressive 223%.
Zenitas Healthcare Ltd (ASX: ZNT)
This home care and health services company is one which I expect to benefit greatly from Australia’s ageing population. Increasingly more older people are wanting to live at home as long as they can instead of in an aged care home. This is where I see Zenitas and its home care business profiting. Especially after the recent Federal budget pledged $1.6 billion over four years for 14,000 people to stay in their homes rather than move into nursing homes.
Where to invest $1,000 right now
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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 VOLPARA FPO NZ. The Motley Fool Australia has recommended Paragon Care Limited and 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.