The ASX200 is potentially witnessing a transition from growth to value shares. This has seen household names such as Afterpay Touch Group Ltd (ASX: APT), Appen Ltd (ASX: APX) and Altium Limited (ASX: ALU) and more, down by more than 20%. However, many names in the healthcare space have remained unscathed.
Here are 2 ASX healthcare shares that could make leaps and bounds in 2020.
1. Nanosonics Ltd (ASX: NAN)
Nanosonics has become a household name in the healthcare sector and as a leading ASX growth stock. Some have even described it as the next CSL Limited (ASX: CSL). What makes Nanosonics an exciting growth prospect is not what it has done, but where it will go next.
The company’s products have become a standard of care in the Australian and New Zealand market, with approximately 75% market penetration. However, when it comes to regions such as Asia Pacific, Europe and the Middle East, Nanosonics has less than a 4% market penetration. A significant opportunity remains.
In FY20, the company expects to expand its geographical reach and adoption in Europe following positive hospital trials and new Ministry of Health guidelines in France, and Managed Equipment Service growth in the UK. Nanosonics also expects Japan to become a vital growth market as clinical studies demonstrated that over 90% of probes were contaminated.
While the Nanosonics share price is currently near record highs, this is certainly a stock I would buy on a pullback.
2. Volpara Health Technologies Ltd (ASX: VHT)
Volpara is a software-as-a-service (SaaS) medical technology company whose AI imaging algorithms assist the early detection of breast cancer. The company is making leaps and bounds in terms of its usage in the United States (US) and its global footprint.
In Volpara’s Q2 FY20 market update, it cited that it remains on track to achieve its forecast of 27% of US women having a group product applied on their images and data. Based on its current estimate, there are currently 25.8% of screened US women (approximately 10.1 million women) using at least 1 Volpara or MRS product. The update suggested that Q2 is traditionally Volpara’s weakest quarter for sales. However, Q2’s cash receipts increasing by 190% on the prior period is very encouraging.
The company’s unique products have created a first mover advantage in the US. It also has major trials underway within the UK and Netherlands, as well as a strong private uptake in Australia and New Zealand.
While Volpara is an excellent growth story, its share price is volatile and currently down more than 4% at the time of writing. The opportunity is one that is more high risk/reward in nature, and I would wait for the share price to consolidate before considering it as a buying opportunity.
The post 2 top ASX Healthcare shares to watch for 2020 appeared first on Motley Fool Australia.
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Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited, Starpharma Holdings Limited, and VOLPARA FPO NZ. The Motley Fool Australia has recommended Nanosonics Limited, Starpharma Holdings Limited, and VOLPARA FPO NZ. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019