ASX Growth Shares in Healthcare space to Build 2020 Portfolio

  • Mar 16, 2020 AEDT
  • Team Kalkine
ASX Growth Shares in Healthcare space to Build 2020 Portfolio

In a portfolio, there must be some ASX growth shares with an exposure to healthcare apart from other sectors. The reason being is that the folks tend to consider healthcare as a non-discretionary expense and healthcare players’ profits most pf the time do not get affected in an economic recession. It is a sign that these stocks can provide great diversification benefits to the portfolio during times of insecurity and can be deemed as long-term growth stocks.

Investors consider long term growth stocks due to volatility of the market, and there are companies that have performed excellently and are well prepared for the upcoming year.

Read More: Opportunities to be Tapped in the Healthcare Sector Amid Coronavirus

In this article, we are highlighting ASX growth shares that could be top growth stocks for 2020 with their satisfactory performance in the past and planned outlook.

Let us zoom lens for two ASX listed health care stocks- NAN, PME

Nanosonics Limited (ASX:NAN)  Revenue up by 19% for first half 2020

An ASX listed health care sector player Nanosonics Limited is into the development of unique automated high-level disinfection device and is an innovator in offering high-level disinfection for ultrasound probes.

The Company’s unique, automated trophon® EPR high-level disinfection device is a comprehensive solution for reducing the spread of health care acquired diseases by lowering the contamination among the patients. 

Revenue for first half 2020, up by 19%-

  • For the first half of 2020, Nanosonics recorded sales of ~$48.5 million, increased by 19% on the prior corresponding period (pcp);
  • Continued strong global installed base growth, up by 17% in the past 12 months and 8% in the last six months to ~22,500 units;
  • The Company reported operating profit before tax to be ~$6.7 million, compared to $11.0 million in pcp;
  • Free cash flow for the half year period was $10.0 million compared to $1.6 million on pcp;
  • Cash and cash equivalents of the company increased $9.8 million to $82.0 million, providing a strong foundation for constant investment in growth.
  • R&D activities continued to grow with the investment of $6.8 million, up 24% on prior corresponding period and 15% on the preceding half period.

 

Substantial investments of $6.8 million are being made in research and development rose by 15% on the previous half and up 24% on pcp-

 

                         company's presentation

 

Outlook-

  • Continued growth in installed base in North America with the financial year 2020 adoption parallel to FY19;
  • NAN mentioned that the continued investment in growth with operating expenses in the second half is anticipated to be ~$36 million resulting in full year operating expenses of in between $67 to $68 million including ~$15 million in research and development.

 

It is noteworthy to mention that the Company is actively considering and monitoring potential risks associated with the recent coronavirus outbreak, and as of now, there are no recorded no material impacts to the business operations.

Stock Information-

On 16 March 2020, NAN last traded at $5.42, down by 10.265%, with a market cap of nearly $1.82 billion. NAN has ~300.54 million shares outstanding, and its fifty-two-weeks high and low price was spotted at $7.730 and $3.985, respectively.  

Pro Medicus Limited (ASX:PME), Strong earnings delivered in FY2019

An ASX listed one of the major health care sector players Pro Medicus Limited (ASX:PME) was founded in 1983 and is a leader in providing medical imaging IT services. The company offers a wide range of radiology IT software to imaging centres, health care groups and hospitals at the global level. The Company purchased Visage Imaging in January 2009, which has now become a provider of best imaging solutions.

Outlook-

  • During the financial year 2019, Pro Medicus revealed several new partnerships and contracts and anticipates that all the contracts and partnerships done in the previous year will contribute to future revenues.

 

                  company's presentation

 

  • Pro Medicus informed that it remains in an excellent position to continue to capitalise on the increasing global as well as local opportunities. Moreover, the management team is working on a significant number of new opportunities; further, the product pipeline of PME remains strong and continues to develop.
  • The Company disclosed that it had received positive feedback on both new Visage 7 Worklist and the AI Accelerator platform, therefore, it can be predicted that there are possibilities that the Company would gain profit from a growing network effect.
  • It is notable that the income of PME in the H1 FY2020 was all recurring transaction-based revenue that establishes the base for development in the subsequent half as well as for upcoming periods.

 

In the financial year 2019, PME delivered extremely strong earnings growth, which is due to increasing demand for its offering from various prominent healthcare institutions and this led to it reporting a substantial increase in full-year profit to ~$19.13 million, reflecting an increase of 91.9% from the preceding year.

Stock Information-

On 16 March 2020, PME last traded at $15.500, down by 6.739% from its last close, with a market cap of nearly $1.73 billion. PME has ~103.95 million shares outstanding, and its fifty-two-weeks high and low price was spotted at $38.390 and $14.600, respectively.  


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