History shows that shortly after catastrophic events end, the world experiences a baby boom.
"When large mortality events occur including diseases, earthquakes, and wars, birth rates decline and on average, reach a trough some 9 months later," stated Firetrail Small Companies Fund's latest monthly memo.
"Following an initial drop, fertility tends to rebound. Birth rates begin to recover [about] 11 months after an epidemic and then increase in the subsequent 1 to 5 years."
That fertility boost happened after World War I ended and the Spanish Flu outbreak in 1918.
And of course, the term "Baby Boomers" is a direct description of the phenomena witnessed in the aftermath of World War II.
So will we see birth rates climb in Australia after the COVID-19 pandemic?
The Firetrail team reckons it's already under way.
"Australians are having more babies and they are swapping out their city lifestyle for the beach and bush," their memo read.
"In contrast to short term phenomena such as the hoarding of toilet paper, these shifts have potential long-lasting implications for the economy and listed companies."
So are there ASX shares that could take advantage?
Signs are pointing to a post-COVID baby boom
The Firetrail team acknowledged that the Institute for Family Studies' current estimate of a 0.3% to 40% boost in birth rates is a wild range.
But recent Australian numbers and "anecdotal" evidence suggest a baby boom could be on the way.
"The number of babies born in NSW public hospitals during the June quarter was the largest on record," stated the Firetrail team.
"A total of 19,113 births were reported, an increase of 9% on the prior year. This is a significant upswing compared with the declining fertility rate over the last 10 years."
And this leads to Monash IVF Group Ltd (ASX: MVF).
As an assisted reproductive services provider, Monash is in the box seat to cash in on increased interest in fertility.
The signs are already looking good, according to the Firetrail team.
"Prior to the pandemic, IVF volumes had been increasing gradually over time. But in FY21, 98,290 IVF cycles were recorded, up 29.3% compared to FY20 and the highest figure on record."
The Firetrail Small Companies Fund is therefore now holding Monash shares.
"While it is still early days to call it a baby boom, recent birth rates and IVF trends indicate we are at the onset of a baby bump!"
According to the Firetrail memo, Monash saw a 40% increase in new patient stimulated cycles.
"There are no signs of a slowdown. New patient registrations in 2H21 were up 8% compared to 1H21, and up 35% on 2H20," the team stated.
"[About] 70% of patient registrations are converted into patient treatments within 3 to 6 months."
Monash shares were trading at 94 cents on Tuesday afternoon, which is about 18% up for the year so far.
