Due to a number of positive tailwinds such as ageing populations, increased chronic disease burden, and better technologies, I believe demand for healthcare services will grow strongly over the next decade.
In light of this, I think the healthcare sector could be a great place to look for small cap shares to buy and hold.
Three growing healthcare shares that I think are worth looking closely at are listed below. Here's why I like them:
Nanosonics Ltd (ASX: NAN)
I think Nanosonics is a great long-term option in the healthcare sector. This is due to its increasingly popular trophon EPR product which is a best in class disinfection system for ultrasound probes. In the first half of FY 2019 the company grew its installed base by 20% on the prior corresponding period to 19,310 units. This growing installed base helped lift capital revenue by 11% and consumables and services revenue by 59%, ultimately leading to a 36% increase in half year sales to $40.7 million. Given the total addressable market for trophon EPR is estimated to be 120,000 units and management has plans to launch new products targeting other unmet needs in the coming years, I believe Nanosonics has a significant runway for growth ahead of it.
Telix Pharmaceuticals Ltd (ASX: TLX)
Telix Pharmaceuticals is a clinical-stage biopharmaceutical company which is focused on the development of diagnostic and therapeutic products based on targeted radiopharmaceuticals or molecularly-targeted radiation. At present Telix is developing a portfolio of clinical-stage oncology products that address significant unmet medical need in renal, prostate, and brain cancer. While there is still a long road ahead, I believe the company's talented management team and its promising products make it worth keeping a very close eye on.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara is a medical technology company which provides software that uses AI imaging algorithms to assist in the early detection of breast cancer. Demand for its offering has been growing strongly in recent years, leading to the company growing its share of the U.S. breast screening market to 7%. Thanks to the quality of the product and its investment in sales and marketing, management expects the company's share to continue growing strongly this year. I believe there is a significant market opportunity for the company, which could make it worth considering a small and patient investment in its shares.
