One of the best areas of the market to have invested your money last year was the healthcare sector.
In 2018 the S&P/ASX 200 Health Care (Index: ^AXHJ) (ASX: XHJ) put on a gain of 17% compared to a ~7% decline for the benchmark index.
While I wouldn’t necessarily expect this level of outperformance again this year, I do think there are some quality options in the sector that have the potential to be market beaters.
Three that I would consider buying in 2019 are as follows:
Cochlear Limited (ASX: COH)
I think this hearing solutions company could be a great option in 2019. Thanks to the quality of its products, increasing demand, and its growing distribution footprint, Cochlear has been a consistently strong performer over the last decade. The good news is that I don’t believe this is going to change any time soon, especially with ageing populations driving demand for hearing assistance products.
CSL Limited (ASX: CSL)
One of the key reasons the healthcare index outperformed last year was because CSL delivered yet another strong return for shareholders. Its strong return in 2018 meant the global biotech company’s shares have now provided a total return of almost 20% per annum for the last decade. Due to its strong core business, growing plasma collection network, and lucrative pipeline of products, I believe CSL is capable of providing further outsized returns in the future.
Volpara Health Technologies Ltd (ASX: VHT)
At the small end of the market I think this provider of breast imaging analytics and analysis products is worth considering. Its software has been growing its share of the U.S. breast screening market at an impressive rate over the last couple of years, which I believe is a testament to its quality. At the end of FY 2018 the company held a 3.2% share of the market, with management targeting a 9% share by the end of FY 2019.
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 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.