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Is the Nanosonics Ltd (ASX:NAN) share price in the buy zone?

The Nanosonics Ltd (ASX: NAN) share price has edged higher on Friday ahead of its annual general meeting.

At the time of writing the infection control specialist’s shares are up 1% to $3.21.

What happened?

Ahead of the event Nanosonics released its annual general meeting presentation. Although the company neglected to provide a trading update for FY 2019, investors appear pleased to see it reiterate some of its expectations for the full year.

Management continues to expect growth in its installed base in the North America market. It expects adoption rates to be similar to those achieved in FY 2018.

Last year it grew its installed base by 26% in North America to 15,620 units. This accounted for 88% of its global installed base.

This year’s strong growth is expected to be driven largely by GE North America’s need to rebuild inventory. GE North America is a distributor for Nanosonics’ products in the market.

In addition to this, the company also expects both trophon EPR and trophon2 products to be available this year. The new trophon product now offers key features such as an enhanced user experience, the creation of accurate digital records, and smart integration.

I have high hopes for this new product. After all, given the original trophon product was rated as the best in its class, the new version looks likely to push the company even further ahead of the competition.

Management is also positive on its prospects in the European market. It expects ongoing strong adoption in the UK and favourable new guidelines and the launch of trophon2 to trigger a broader adoption in Germany.

Should you invest?

While there is no getting away from the fact that Nanosonics’ shares are expensive, I do believe that it has enormous growth potential that goes some distance to justifying this.

Management estimates that the global opportunity currently stands at 120,000 units. This means that it has penetrated just 15% of the overall market. And given its status as being the best in class, I believe it is well-positioned to grow its share of the market significantly over the next decade.

All in all, this could make it worth holding onto its shares for the long-term along with fellow healthcare shares Pro Medicus Limited (ASX: PME) and Volpara Health Technologies Ltd (ASX: VHT).

These blue chip stars could also be worth considering as buy and hold investments. They have been tipped as strong buys.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited, Pro Medicus Ltd., and VOLPARA FPO NZ. 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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