Due to a number of favourable tailwinds such as ageing populations, better technologies and treatments, and increasing chronic disease burden, demand for healthcare services is expected to increase strongly over the next few decades.
In light of this, the healthcare sector has been tipped as an area of the market to consider long term investments. But which shares should you buy? Two healthcare shares that are highly rated are listed below:
Mach7 Technologies Ltd (ASX: M7T)
Mach7 is a medical imaging data management solutions provider which uses software to create a clear and complete view of the patient.
Its software helps inform diagnosis, reduce care delivery delays and costs, and ultimately improves patient outcomes. The company has also expanded its offering this year with the acquisition of leading provider of an enterprise image viewing technology, Client Outlook. This acquisition increases Mach7's total addressable market from US$0.75 billion to US$2.75 billion.
Analysts at Morgans are bullish on the company and have an add rating and $1.49 price target on the company's shares. They have been pleased with the acquisition and integration of Client Outlook and believe the company's solutions are well-placed in the current environment where demand for telehealth is growing fast.
Pro Medicus Limited (ASX: PME)
Pro Medicus is healthcare technology company that provides radiology information systems (RIS), picture archiving and communication systems (PACS), and advanced visualisation solutions to healthcare organisations across the globe.
It has been growing at a consistently strong rate over the last few years thanks to the quality of its software, its sizeable market opportunity, and the shift away from legacy systems.
Pleasingly, Pro Medicus has been tipped to continue this positive form over the coming years by analysts at Morgans. The broker currently has an add rating and $35.02 price target on the company's shares. It was pleased with the recent signing of a five-year contract with MedStar Health worth a total of A$18 million. Morgans notes that this completely cloud-based contract showcases the flexibility of its technology.
