The healthcare sector is expected to do well in the coming period for multiple reasons.
In the short term, the health industry will enjoy resilient patronage through a depressed economy and a resurgence in activity after the COVID-19 pandemic.
In the long run, the ageing population in most of the developed world means increased demand for healthcare solutions and services.
So in this spirit, here are two S&P/ASX 200 Index (ASX: XJO) healthcare shares that are recommended as buys this week:
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'Sizable market share opportunities'
Sequoia Wealth Management senior wealth manager Peter Day likes the look of respiratory devices maker ResMed CDI (ASX: RMD).
Its share price has climbed almost 10% so far this year. But it has cooled off in excess of 7% since the start of the month, to perhaps present a buying opportunity.
"ResMed makes medical devices to treat sleep-disordered breathing," Day told The Bull.
"Our analysis highlights potential for industry device volume growth, with [sizable] market share opportunities."
Already the business performance has impressed.
"The company increased revenue by 29% in the third quarter of fiscal year 2023 when compared to the prior corresponding period," said Day.
"ResMed's growth outlook is attractive."
Indeed, Day's peers largely agree with him.
According to CMC Markets, 19 out of 26 analysts currently rate RedMed shares as a buy. Fifteen of them consider it a strong buy.
'Appealing entry point' for boom stock
Seneca Financial Solutions investment advisor Tony Langford's pick is Ramsay Health Care Ltd (ASX: RHC).
The Ramsay stock price has plunged 17% since 11 April.
"The shares offer an appealing entry point," said Langford.
The latest numbers out of the private hospital operator were bullish.
"Total revenue of $11.242 billion for the nine months ending March 31, 2023 was up 10.9% on the prior corresponding period," Langford said.
"Earnings before interest and tax of $750.9 million were up 10.5%."
He is happy to buy Ramsay shares now with all the tailwinds seemingly in place. The stock even pays out a 1.7% dividend yield.
"Increasing revenue reflected growth in surgical admissions, a recovery in non-surgical admissions and contributions from acquisitions."
