The healthcare sector is one of the best areas to invest in the long run. With increasing human life expectancy, people pursue the top healthcare opportunities to solve medical problems. Considered as one of the most electrifying sectors of the stock market, the healthcare sector holds great promise to deliver incredible returns to investors, in a very short span of time. Thus, regardless of global market volatility, trade tensions, pandemic fears, investors are turning their heads towards pouring cash in healthcare shares in a quest to earn profits.
The Australian Healthcare Sector is one of the most inclusive ones across the globe, with the industry forecasted to see substantial development in the coming years anticipating numerous growth opportunities. It is estimated that the expenditure in the healthcare sector will rise at a CAGR of 5% between 2019-2023. Increasing the occurrence of chronic illnesses, modern technological advancements, and growing aging population drives the growth of the healthcare sector.
The year 2019 was the hot year for the ASX-listed healthcare shares, as the sector witnessed 59% growth on a one-year basis (shown below), underpinned by the exceptional performance of some of the leading healthcare shares.
Let’s have a look at some of the healthcare shares that have performed outstandingly in 2019 in terms of generating returns.
- Polynovo Limited (ASX: PNV): PolyNovo’s progress in 2019 has been remarkable with the stock delivering an outstanding positive return of 209% (1 Jan 2019-1 Jan 2020). Its success is largely credited to the sales of its top product, the NovoSorb BTM that has produced an excellent cosmetic result for patients and generated $348 million in revenue for the FY2019. PNV’s stock settled the day’s trade at $2.91, on 06 February 2020, down 1.02 from its previous close.
- Pro Medicus Limited(ASX: PME): ProMedicus’ shares generated an impressive 96% return in 2019 (1 Jan 2019-1 Jan 2020), largely driven by its remarkable FY2019 performance during which the stock generated $50.11 million in revenue, signifying an increase of 47.9%. PME last traded at $26.25, on 06 February 2020, up 1.784% from its last closing price.
- Ramsay Health Care Limited (ASX: RHC): Ramsay’s progress is evident by 24% return recognized in 2019 (1 Jan 2019-1 Jan 2020), mainly driven by the acquisition of a pan-European Health Care Company, Capio in 2018 along with the recognized revenue that amounted to $11.4 billion, up 24.4%. RHC was at $79.29, by the end of the trading session on 06 February 2020, up by 0.724% from its last closing price.
- Nanosonics Limited (ASX: NAN): Nanosonic’s shares rose 128% in 2019 (1 Jan 2019-1 Jan 2020) reflecting an outstanding year while delivering a remarkable 39% increase in revenue amounting to $84.3 million with a 201% upsurge in operating profit before tax valued $16.8 million. NAN’s stock closed at $7.1, on 06 February 2020, climbing up by 3.048% compared to its prior closing price.
- CSL Limited (ASX: CSL): CSL delivered a considerable return of 48% during 2019 (1 Jan 2019-1 Jan 2020), reflecting a stellar year for the company underpinned by the strong financial performance with the solid upsurge in revenue by 11% for FY2019. The company continued to be the market darling with its shares reaching its all-time (intra-day) high of $323.230 on 06 February 2020, while the stock ended the trading session at $320.86, moving up by 1.654 percent from its last close. Moreover, CSL has recently been ranked as one of the top 3 most valuable biotechnology companies in the world.
Outlook for 2020 - What’s in store for the healthcare sector in 2020?
The healthcare industry is going to see significant growth in the next few years, with renowned healthcare companies that are determined to redefine themselves with the digital revolution in their main functional areas through a customer-centric approach.
Some of the key areas that might benefit in 2020 pertaining to the healthcare sector are as follows:
Medical research set for explosive growth – Backed by robust funding from the government in innovative medical projects aiding transform groundbreaking medical ideas into reality, thereby, improving generations of future citizens.
Technology-driven growth – Investors are of the belief that technology has the supremacy to transform the healthcare sector and it is predicted that there will be an increased focus on investments and alliances in 2020. One such technology that is primed for explosive growth within the healthcare domain is Artificial intelligence (AI) that refers to the use of complex algorithms and software that mimics human intellect for the assessment of intricate medical data, thereby, re-wiring the modern-day concept of healthcare delivery.
Besides, telehealth including telemedicine, Internet of Medical Things (IoMT) that includes wearables such as ECG and EKG monitors, Cloud-based solutions for healthcare providers and patients, augmented reality (AR) and virtual reality (VR) helping doctors and practitioners in evaluating data from other upcoming technologies compared to real-world data for better diagnosis and planning for treatment method, chatbot assisting specialists in managing appointments, predictive analytics helping doctors in collecting and analyzing past data to be used for generating insights, are some of the key trends that are likely to transform the future of healthcare sector in 2020.
Read more by clicking at 2020 Global HealthCare Outlook
In a nutshell, the outlook for 2020 for the healthcare sector and the health care shares looks promising with significant advancements being made in this sector to drive its growth.
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