If you're a fan of buy and hold investing then I think the healthcare sector is a great place to look for investment ideas.
This is because due to ageing populations, increased chronic disease burden, and better technologies, I expect demand for healthcare services to increase significantly over the next decade or two.
With that in mind, should you buy these healthcare shares?
Nanosonics Ltd (ASX: NAN)
Nanosonics is an infection control specialist which I believe has a bright future ahead of it. At present the company is a bit of one-trick pony with its hugely popular trophon EPR product, which provides high-level disinfection of ultrasound probes. But management is intent on releasing a range of new products over the coming years. The first of which is expected to be released by the end of FY 2020. I believe these new products and the sizeable market opportunity for trophon EPR will lead to above-average earnings growth over the next decade. This could make it a great buy and hold option.
Ramsay Health Care Limited (ASX: RHC)
While I think that Ramsay Health Care is one of the highest quality companies on the Australian share market, I wouldn't be a buyer of its shares at present. This is because the company's operations in Australia, France, and the UK are all facing tough trading conditions currently and I don't believe things are going to improve quickly. In light of this, I think the private hospital operator could continue to underwhelm over the next couple of years.
Volpara Health Technologies Ltd (ASX: VHT)
I think that Volpara is one of the best healthcare shares at the small end of the market. The New Zealand-based medical technology company provides software that uses AI imaging algorithms to assist in the early detection of breast cancer. The company has been growing its share of the U.S. breast screening market at a quick pace, which has led to strong growth in annual recurring revenue (ARR). As of its last update, Volpara's ARR had grown 56% since the end of FY 2018. Due to the quality of its product, I believe there is still a significant runway of growth ahead of the company, which could make it worth considering a small investment in its shares.
