Due to populations around the world getting older and chronic disease burden increasing, demand for healthcare services continues to rise.
I expect this trend to continue for several decades, which could make the healthcare sector a great place to look for investments.
Three healthcare shares that I feel could be long-term market beaters are listed below. Here’s why I like them:
CSL Limited (ASX: CSL)
The first healthcare share to consider is CSL. It is one of the world’s leading biotherapeutics companies and could be a great long term option for investors. This is due to the quality of its CSL Behring and Seqirus businesses. Both businesses look very well-positioned for long-term growth due to their leading products and lucrative development pipelines. In addition to this, in the near term, strong demand for immunoglobulins products and tight market conditions look set to underpin above-average growth. Another positive is that CSL has proven resilient during the coronavirus pandemic. This morning its reaffirmed its earnings guidance for FY 2020.
Opthea Ltd (ASX: OPT)
Another healthcare share to consider buying with a long term view is Opthea. It is a developer of novel biologic therapies for the treatment of eye diseases. The product that has me most excited is its OPT-302 combination therapy. Last year Opthea unveiled very strong Phase 2b study results for OPT-302. If its Phase 3 trial proves just as successful, then the future could be very bright for Opthea. Management advised that current standard of care treatments for wet age-related macular degeneration and diabetic macular edema had combined sales of ~US$10 billion in 2018. Another positive is its hefty cash balance and its zero debt. I expect this to be sufficient to see the company through to its Phase 3 trial. However, there is always a risk that the trial may not go as planned. So, it may be best restricting an investment to just a small part of your portfolio.
Pro Medicus Limited (ASX: PME)
A final healthcare share to consider buying is Pro Medicus. It is a provider of a full range of radiology IT software and services to hospitals, imaging centres, and healthcare groups. It has been growing at an explosive rate over the last decade thanks to increasing demand for its software from leading healthcare institutions. For example, in FY 2019 Pro Medicus delivered a massive 91.9% increase in full year profit to $19.1 million. Given the quality of its products and its sizeable market opportunity, I believe the company is capable of continuing this strong form for some time to come.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.