One area of the share market that I'm very bullish on over the next decade is the healthcare sector.
This is because I believe there are a number of favourable tailwinds that could help drive strong demand for healthcare services in the future. These include the development of better treatments, ageing populations, and increasing chronic disease burden.
With that in mind, are these healthcare shares in the buy zone today?
CSL Limited (ASX: CSL)
I think this leading biotherapeutics company is a great option for investors looking for exposure to the healthcare sector. Thanks to its strong core business, its growing plasma collection network, and fast-growing Seqirus influenza business, I believe CSL is well-positioned to continue its strong growth for many years to come. Another reason to be positive is its significant investment in research and development. During the first half of FY 2019 CSL spent US$391 million on R&D and opened its world class Global Hub for Research and Translational Medicine in Melbourne. I expect this to keep CSL at the forefront of its key markets for the foreseeable future.
Nanosonics Ltd (ASX: NAN)
Nanosonics is an infection control specialist which I believe could be a great buy and hold option. Sales of its popular trophon EPR product, which provides high-level disinfection of ultrasound probes, have been growing strongly and led to the company posting a strong lift in revenue and profits in the first half of FY 2019. Earlier this week Nanosonics reported record first half sales of $40.7 million. This was a 36% increase on prior corresponding period and 33% on the second half of FY 2018. In addition to this, operating profit before tax came in at $11 million, up 195% on prior corresponding period. Due to its large market opportunity and the planned release of new products, I believe Nanosonics can continue growing strongly for many years to come.
Ramsay Health Care Limited (ASX: RHC)
Ramsay Health Care is arguably one of the highest quality companies on the Australian share market. But although I'm a huge fan of the private hospital operator, I'm not convinced that now is the time to invest. The reason for this is that Ramsay's operations in Australia, France, and the UK are all facing tough trading conditions currently and I'm not sure things are going to improve greatly in the near term. Because of this I'll be keeping my powder dry, but I'll be looking for signs of improvements when it releases its half year results later this week.
