Shares in the healthcare sector have been a favourite amongst investors during the coronavirus pandemic. Here are 3 ASX healthcare shares that have shown resilience during the pandemic and are trading at all-time highs.
Ansell Limited (ASX: ANN)
Ansell is a global leader in developing, manufacturing and distributing health and safety protection solutions. In mid-March, I wrote an article about Ansell and the potential surge in demand for safety and protective equipment. I wish I acted on this hunch as the Ansell share price has surged 86% from its lows in March. The company is currently trading at all-time highs.
With people becoming more aware of safety and hygiene protocols due to COVID, Ansell is well poised to benefit. In late March, Ansell reaffirmed its FY20 guidance for earnings per share, citing strong demand for its hand and body protection products. Ansell also assured investors that its balance sheet remains in a strong position and the company is working to maximise its product output.
ResMed Inc (ASX: RMD)
ResMed is another healthcare share that has surged to all-time highs. The company is a global manufacturer of medical devices and treatments focused on the management of respiratory and sleep disorders. The coronavirus pandemic has seen a surge in demand for the company’s invasive and non-invasive ventilators.
In Q3, ResMed tripled its ventilator production to produce more than 52,000 units for an urgent Australian Government contract. The ResMed share price has the potential to see further upside in the short term as fears of a second wave of coronavirus infections grow.
Fisher and Paykel Healthcare Corp Ltd (ASX: FPH)
Fisher and Paykel have been one of the best performers on the S&P/ASX 200 (INDEXASX: XJO) for FY20. The company specialises in manufacturing and the distribution of products used in respiratory care. Fisher and Paykel recently published its full-year report for FY20 which saw Fisher and Paykel record an 18% increase in operating revenue of NZ$1.26 billion for the year.
The company attributed the boost in revenue to an increase in demand for its Optiflow nasal high-flow therapy. Fisher and Paykel noted strong hardware sales and demand from hospitals for products used to treat COVID-19.
This demand has also been reflected in the company’s share price which is trading near all-time highs. With fears of a second wave of coronavirus infections emerging, the Fisher and Paykel share price could see further upside as demand for ventilation treatments and respiratory humidifiers increase.
Should you buy?
ASX healthcare shares are usually a more defensive option during tough economic times as individuals still need medical care. The coronavirus pandemic will likely add to the essential services of healthcare as many individuals may pay more attention to their health.
In my opinion, investors should compile a watchlist of healthcare shares that could blossom in 2020 and beyond, in particular, I would focus on health companies that have exposure to vaccines or auxiliary treatments for COVID-19.
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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. and ResMed Inc. 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.
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