Over the last 12 months the healthcare sector has once again been a great place to invest your money. During this time the S&P/ASX 200 Health Care index has risen an impressive 18%.
Whilst I'm not convinced that this level of return will continue over the next 12 months, I do believe there are a number of shares in the sector that are capable of generating market-beating returns in the future.
Three healthcare shares that I would consider buying are listed below:
CSL Limited (ASX: CSL)
I think the best option in the healthcare sector for investors that are looking for a long-term investment is CSL. The biotherapeutics giant has been a strong performer in recent years thanks to growing demand for its immunoglobulin products and the emergence of its Seqirus influenza business. The good news is that I expect similarly strong growth in the coming years thanks to the company's leading products, investments in research and development, and potentially lucrative product pipeline.
Nanosonics Ltd (ASX: NAN)
Nanosonics is the infection control specialist behind the popular trophon EPR product. This product is a best in class disinfection system for ultrasound probes. Thanks to the quality of the product the company's installed base has been growing strongly in recent years. At the end of the first half of FY 2019 Nanosonics' installed base increased to 19,310, up 20% on the prior corresponding period. Pleasingly, as its installed base grows, so too does demand for the consumables that the system uses. During the half the company reported a 59% increase in sales associated with consumables and service to $24.3 million. I expect more of the same in the second half and beyond, supported by the launch of new products.
Volpara Health Technologies Ltd (ASX: VHT)
Another quality option to consider in the healthcare sector is Volpara Health Technologies. It is a medical technology company providing software that uses AI imaging algorithms to assist in the early detection of breast cancer. Volpara has been growing its annual recurring revenues at an explosive rate again this year, reporting an 86% increase in FY 2019 earlier this week. I remain confident that this strong growth can continue thanks to the quality of its product, the expansion of its salesforce, and recently announced regulatory recommendations by U.S. authorities.
