Healthcare is one of those industries that enjoys relatively stable demand through tougher economic times.
With consecutive interest rises forcing Australians to close their wallets, this might be a consideration for the coming period.
But of course, the well-known ASX shares in the sector are already well bought.
So one Wilson Asset Management analyst has dug deeper into his research to come up with a couple of buys that are not yet household names:
'This company can re-rate over the next few years'
Probiotec Limited (ASX: PBP) only has a market capitalisation of $180 million.
But for such a small cap it has managed to hold its stock price pretty well in 2022, only down 1.76% so far.
Wilson senior equity analyst Sam Koch is buying the pharmaceutical manufacturer and distributor.
"We believe the stock offers investors valuation and earnings upside," he said in a Wilson video.
"What the market's missing here is their ability to compound earnings growth at a very high rate, relative to its current valuation."
The business' "strong organic growth" is accompanied by bolt-on acquisitions, he added.
"Trading at 10 times P/E with over 15% [earnings per share] growth projected, we believe that this company can re-rate over the next few years."
While coverage is sparse on Probiotec, at least Shaw and Partners currently agrees with Koch, rating the stock as a strong buy.
Probiotec hands out a 2.5% dividend yield.
Share price now below PE ratio of ONE
CogState Limited (ASX: CGS) is arguably a technology business in addition to its involvement in the health sector.
That's because it's a cognitive science company that provides tech and services to biotechnology and pharmaceutical clients conducting clinical trials.
Koch said that big pharma relies on CogState's technology for their studies into Alzheimer's Disease.
"What we're really attracted to in CogState is that they were one of the first companies to provide the software-first technology, which has accelerated the industry's push towards decentralised clinical trials."
The value of CogState's services was recognised in one of its largest clients actually taking a 7% shareholding, according to Koch.
"The company's trading at below one times earnings-to-price growth multiple with over 15% of the market cap caught up in cash," he said.
"We believe that acquisitions and earnings upgrades will drive the stock from here."
According to CMC Markets, three of four analysts currently rate the stock as a strong buy.
The CogState share price has dropped more than 19% so far this year.
