Thanks to a number of favourable long term tailwinds, the healthcare sector looks like it could be a great place to make buy and hold investments.
But which ASX healthcare shares should you be focusing on? Two that are highly rated are listed below. Here's what you need to know about them:
Healius Ltd (ASX: HLS)
The first healthcare share to look at is Healius. It is one of Australia's largest pathology and diagnostic imaging providers. It offers pathology and imaging services via various brands including Dorevitch Pathology, QML Pathology, Laverty Pathology, and Healthcare Imaging Services. The company also has a network of day hospitals and IVF clinics.
It has been performing very strongly in FY 2021. For example, during the first half it reported a 16% increase in revenue to $953.5 million and a 190% jump in net profit to $75.6 million. This was driven largely by its key pathology business, which reported a 22% increase in revenue to $711.4 million and significantly wider margins.
Pleasingly, its solid form has continued since the end of the first half, with Healius reporting solid growth during the third quarter.
Analysts at Goldman Sachs are positive on the company. They currently have a buy rating and $4.40 price target on its shares.
Pro Medicus Limited (ASX: PME)
Another healthcare share that is highly rated is Pro Medicus. It provides software that facilitates the clinical assessment of medical images. It has been growing at a very strong rate in recent years thanks to the rapidly growing demand for solutions that can process, transfer and store this type of data efficiently. This is particularly the case given that speed and accuracy is fundamentally linked to both treatment success and commercial incentives.
In light of this, it will come as no surprise to learn that Pro Medicus has been winning a number of major contracts over the last 12 months. One of which came earlier this month with the University of Vermont for its Visage platform. This contract is worth $18 million over a total of eight years.
Goldman Sachs is also bullish on the Pro Medicus. It currently has a buy rating and $53.80 price target on its shares. Commenting on recent contract wins, it said: "We believe the heightened rate of uptake underlines the increased value being ascribed by hospitals towards solutions that can provide additional flexibility/resilience; a theme we expect to persist."
