Cochlear Ltd (ASX: COH), Nanosonics Ltd (ASX: NAN) and ResMed Inc (ASX: RMD) shares are amongst my top three ASX healthcare shares.
Why Healthcare?
I think investing in healthcare companies can provide great long-term returns, as these companies often have a competitive advantage which can help them meaningfully increase profits and cash flow over time.
For example, investors who bought into CSL Ltd (ASX: CSL) when they initially floated on the ASX have seen its valuation rise from just $300 million to $89 billion today. That’s a return of almost 300x — before dividends are included!
Here are three other ASX healthcare companies I like and would consider adding to my portfolio at the right price, should a good opportunity arise.
Cochlear Ltd
As I previously wrote in this Rask Media article, hearing aid marker Cochlear has had a life-changing impact on me personally.
Obviously, I have a vested interest and would like to see them continue to grow their profits. This is because they can continue to upgrade the external processor for people like myself, while also upgrading newer models to assist future recipients.
While Cochlear’s half-year results may be a little disappointing to investors, I am confident that over the long term they can continue to grow their profits.
Resmed Inc
ResMed manufactures continuous positive airway pressure (CPAP) machines. CPAP is considered the gold standard for treating sufferers of sleep apnea. This is a big growth market.
But if we throw in data collection and the likelihood of using artificial intelligence to improve diagnostics and treatment for patients, ResMed’s long-term growth prospects look good.
ResMed’s half-year results disappointed the market, but investors reacted positively to its third-quarter report — highlighting yet again that it’s important to stay focused on the long-term.
Nanosonics Ltd
Nanosonics manufactures the Trophon EPR ultrasound probe disinfector and its related consumables. Trophon saves time and helps to prevent the spread of infections in hospitals.
Investors liked Nanosonics’ half-year report, but it was only six months earlier that investors were clamouring for an exit after the company’s FY18 results.
Again, it’s important to stay focused on the long-term with healthcare shares and ride the dips in share price — or potentially take them as an opportunity to buy more!
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Disclosure: at the time of writing, Andrew does not hold any shares in the companies mentioned.
