Because 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:
Alcidion Group Ltd (ASX: ALC)
Alcidion is an informatics solutions provider which develops and sells healthcare analytics software for hospitals and other healthcare providers. This software aims to improve the efficacy and cost of delivering services to patients and reduce hospital-acquired complications. Earlier this year the company won its first major contract with the Dartford and Gravesham National Health Service (NHS) Trust in the United Kingdom. Given how the NHS is currently transitioning to a paperless environment, I wouldn't be surprised to see more and more large contracts being won over the coming 12 months.
Telix Pharmaceuticals Ltd (ASX: TLX)
Telix Pharmaceuticals is a clinical-stage biopharmaceutical company 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 needs in renal, prostate, and brain cancer. Its shares may have been on fire on 2019, but I don't believe it is too late to consider an investment if you're prepared to hold its shares for the long term.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara is a medical technology company which provides software that leverages artificial intelligence imaging algorithms to assist with the early detection of breast cancer. It was a strong performer once again in FY 2019, posting a 78% increase in revenue thanks to its increasing market share in the United States. At the end of the period its market share had grown by 120% to 7.1%, I expect further market share gains in FY 2020, which should lead to strong revenue growth. This should also be supported by the acquisition of US-based MRS Systems and today's announcement of a sales distribution agreement with ScreenPoint for its Transpara software.
