Due to favourable tailwinds including ageing populations, improvements in treatments, and increased chronic disease burden, I believe the healthcare sector is a great place to consider making long term investments.
Whilst there are a lot of options in the sector right now, three of my favourites are listed below. Here's why I think they could be in the buy zone:
CSL Limited (ASX: CSL)
I think this biotech giant is arguably the best healthcare share on the Australian share market. In the first half of FY 2019 CSL posted an 11% increase in revenue to US$4,505 million and a 10% lift in net profit after tax to US$1,161 million. A key driver of this growth was its immunoglobulins sales which increased 12% to US$1,708 million. This means they now account for ~38% of total sales. Pleasingly, global demand for immunoglobulins remains strong, which I believe has positioned CSL for a solid second half. And with the company's influenza business growing strongly and its pipeline filled with a number of lucrative therapies, the future looks very bright for CSL.
Nanosonics Ltd (ASX: NAN)
Another healthcare share to consider buying is this infection control specialist. Nanosonics is the company behind the popular trophon EPR product, which is a best in class disinfection system for ultrasound probes. In the first half of FY 2019 Nanosonics' installed base increased by 20% on the prior corresponding period to 19,310 units, leading to strong demand for the consumables that it uses. Nanosonics reported a whopping 59% increase in sales associated with consumables and services to $24.3 million. Given the size of the market and management's plan to launch new products in the near term, I think Nanosonics is well-positioned to continue growing at a strong rate for some time to come.
Pro Medicus Limited (ASX: PME)
Pro Medicus is a healthcare technology company which has also been growing at an impressive rate over the last few years. Pleasingly, this strong form has continued in FY 2019 with the company posting a 59.4% increase in half year revenue to $25.3 million and a 79.9% jump in underlying net profit after tax to $9.2 million. Strong demand for its popular Visage health imaging software in all its key markets drove the impressive result. Due to the quality of its product and its sizeable market opportunity, I remain confident that there will be more of the same in the second half and beyond. This could make Pro Medicus a great buy and hold option.
