Leading Health Care stocks - NAN, VHT, PME, CSL, RMD

  • Nov 17, 2019 AEDT
  • Team Kalkine
Leading Health Care stocks - NAN, VHT, PME, CSL, RMD

Health care sector in Australia is growing tremendously, as there is always the requirement of developing new therapies or treatments for the diseases which are chronic and rare or for the unmet medical needs. The Australian health care industry comprises of medical device companies, pharmaceutical and biotech players, health insurance providers, hospitals, and general pharmacies. The pharmaceutical companies invest a big amount of money in their research and development, which includes pre-clinical and clinical trials. In Australia, Medicare is the foundation of the health system, including three major parts - medical services, public hospitals and medicines.

Australia’s health care industry represents flourishing stocks with outstanding growth prospects. In this article, we are discussing health care stocks - NAN, VHT, PME, CSL and RMD - which are among the leading industry players.

Nanosonics Limited (ASX: NAN)

Nanosonics Limited (ASX: NAN), headquartered in New South Wales, Australia, is a health care company specialised in the development and commercialisation of infection control solutions. Its first product - unique, automated trophon® device, is a universal solution for the reduction of cross contamination between patients. It is a proprietary automated technology for low temperature, high level disinfection (HLD) of ultrasound probes.

Board Changes

At the end of October 2019, the company updated the market with new addition to its board. Lisa McIntyre, who has significant health care and commercial experience, would join the company as a new non-executive director, effective 13 December 2019. Currently, she is a non-executive director of icare NSW, HCF Group, and The University of Sydney (Senate Fellow of the University).

Commenting on the new appointment, Nanosonics’ Chairman Maurie Stang said

Financial Highlights- (year ended 30 June 2019)

During FY2019, the company witnessed significant and successful investments in R&D programs, in addition to management, production, and consumer and trade partner engagement, at a global level.

  • Nanosonics generated revenue of $84.3 million for the fiscal year 2019, representing an increase of 39% when compared with the same period a year ago.
  • Gross profit of the company for FY2019 was $62.8 million, up 39% year on year.
  • Global installed base stood at 20,930
  • The company reported $72.2 million in cash and cash equivalents at the end of FY2019.
  • Free cash flow for the financial year 2019 was $2.6 million.
  • trophon ®2 was rolled out in regions including Europe and North America.

Stock Performance

The company’s stock settled at $7.370 on 15 November 2019, down 0.674% from its previous close. The company has a market cap of nearly $2.23 billion and ~ 300.36 million outstanding shares, with a 52 weeks high price of $7.600 and a 52 weeks low price of $2.650. The NAN stock has delivered a good return of 166.91% on year to date basis and 60.95% in the last six months.

Volpara Health Technologies Limited (ASX: VHT)

MedTech SaaS company, Volpara Health Technologies Limited (ASX: VHT) is based in Wellington, New Zealand, and is engaged in developing clinical solutions in the field of medical imaging. The company is involved in providing digital health solutions to facilitate personalised breast cancer screening software applications.

The company is scheduled to release half-year results for the period ended 30 September 2019, on Wednesday, 20 November 2019.

Q2 FY20 Quarterly Highlights (period ended 30 September 2019)

  • Cash receipts from customers were reported at NZ$4.9 million, up 190% as compared to Q2 FY19.
  • Cash on hand at the end of the second quarter was NZ$40.2 million.
  • Group annualised recurring revenue was nearly NZ$15.7 million at the end of Q2 FY2020.
  • The company’s at least one software product is now contracted to approximately 25.8% of the US market.

The company is looking forward towards the next quarter, with the delivery of new integrated products at the Radiological Society of North America. Moreover, in the third quarter, the publication of the DENSE results from the Netherlands after a 10-year randomised control trial using Volpara®Density™ software is scheduled. Additionally, a possible breast density announcement from the FDA is expected in Q3.

Volpara is on track to meet its mid-range forecast for annualised recurring revenue of NZ$17.1 million for FY2020.

Stock Performance

With a market cap of nearly $408.87 million and approx. 218.06 million outstanding shares, the company’s stock settled for the day at $1.985 on 15 November 2019, up 5.867% from its previous closing price. Its year to date return is 71.62%.

Pro Medicus Limited (ASX: PME)

A leading medical imaging IT provider, Pro Medicus Limited (ASX: PME) was founded in 1983 and operates globally with offices in Melbourne, Berlin and San Diego. The company, which purchased Visage Imaging in January 2009, is a global provider of imaging solutions to health care groups, imaging centres and hospitals.

The company’s AGM is scheduled on Tuesday, 19 November 2019 in Melbourne. The highlights of this meeting are Accounts and Reports, Remuneration Report, Election of Directors and Other Business.

OSUWMC Contract

The company and The Ohio State University Wexler Medical Center (OSUWMC) executed a deal, based on a transaction-based licensing model for its Visage 7 technology. Under this five year agreement, PME’s technology would be implemented in all the radiology departments of OSUWMC.

The implementation is due for completion in mid-2020.

Financial Highlights- (Year ended 30 June 2019)

2019 has been another record year for the company.

  • Pro Medicus generated revenue of $50.11 million, representing an increase of 47.9% as compared to the last fiscal year;
  • EBIT margin of the company increased to 51.6%;
  • Cash reserve of the company stood at $32.32 million;
  • NPAT of PME was reported at $19.13 million, up 91.9% as compared to FY2019;
  • The company’s underlying after-tax profit was $22.74 million, increased by 83.1% year on year.

Stock Performance

The company’s stock settled at $26.420 on 15 November 2019, up 2.802%, with a market cap of nearly $2.67 billion. The stock has a 52 weeks high price of $38.390 and a 52 weeks low price of $8.836, while its year to date return stands at 126%.

CSL Limited (ASX: CSL)

Melbourne headquartered health care company, CSL Limited (ASX: CSL) is engaged in research and development of pharmaceutical products for the prevention and treatment of serious human medical conditions.

Key Highlights- (period year ended 30 June 2019)

  • The company generated revenue of US$8,539 million, up 11% as compared to the last fiscal year.
  • Net profit after tax for FY2019 was US$1,919 million, which was increased by 17% as compared to last financial year.
  • In the United States, the company opened 30 new plasma collection centres.
  • CSL achieved 24 product registrations or new indications for serious diseases in various countries.
  • In the financial year 2018-19, the company had 34 clinical trials in operation in all therapeutic areas and out of those three trials had first patient enrolment during the year.

Stock Performance

The company’s stock settled for the day at $274.740 on 15 November 2019, up by 1.88%, with a market cap of nearly $122.39 billion. The stock has a 52 weeks high price of $274.740 and a 52 weeks low price of $173.000, while it has delivered a return of 43.98% on a YTD basis.

ResMed (ASX: RMD)

A health care company, ResMed (ASX: RMD) is into developing superior quality medical devices for providing a top-quality and healthier life to patients with sleep apnoea, chronic obstructive pulmonary disease (COPD), and other chronic diseases. ResMed has its software platform outside hospitals, which helps health care professionals and attendants to provide better care to patients.

First Quarter 2020 Highlights- (quarter ended 30 September 2019)

During the September 2019 quarter, the company reported strong performance with double-digit topline revenue growth, balanced growth across its businesses and regions, and further improvements in operating leverage, resulting in double-digit growth at the bottom line.

  • The company generated revenue of $681.1 million, up 16%;
  • The net operating profit of the company increased by 19% for the quarter;
  • The non-GAAP operating profit of ResMed increased by 22%.

Source: Company’s Report

ResMed is expecting to be on track to improve 250 million lives in out-of-hospital healthcare in 2025.

Stock Performance

The company’s stock settled for the day at $21.440 on 15 November 2019, down by 0.093%, with a market cap of nearly $30.76 billion. The stock has a 52 weeks high price of $21.740 and a 52 weeks low price of $12.650, while it has delivered a return of 33.79% on a year to date basis.


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