Investing in ASX Healthcare Shares
The Australian healthcare sector is considered a well-performing sector economically. Healthcare is growing at the fastest pace of Australia’s GDP. Compared with its regional and global peers, Australia has positioned itself in terms of its private-public partnerships, adjusted private health spends per capita, and its ability to attract overseas healthcare talent to live and work in Australia. This particular sector contributes greatly to the economy. It has been consistently positioned well in the better life index of the Organization for Economic Co-operation and Development (OECD), which measures the way citizens perceive their physical, mental, and social well-being. Government data estimates that by 2055, the average life expectancy will be 95.1 years for men and 96.6 years for women. Australia has a number of healthcare companies whose ASX shares contribute significant revenue to the economy. Cochlear Limited (ASX: COH) and Nanosonics Ltd (ASX: NAN) are examples of ASX healthcare stocks.
What are ASX healthcare shares?
The Australian healthcare sector has numerous well-performing stocks that are listed on the Australian securities exchanges and are generally known as ASX healthcare shares. The ASX healthcare sector broadly covers biotech and pharmaceutical companies, owners and operators of hospitals and other medical facilities, and designers and manufacturers of medical devices.
The ASX healthcare sector consists of a diverse range of companies, some of which are among the largest listed on the exchange by market capitalization. For example, leading biotechnology company CSL Limited (ASX: CSL) has a market capitalization of $127.55 billion and a current market price of $264.04. Cochlear Limited (ASX: COH) with a market cap of $17.04 billion and a current market price of $259.64 and Nanosonics Limited (ASX: NAN) with a market cap of $1.30 billion and a share price of $4.29 are examples of ASX healthcare shares (Note: market cap and share price mentioned as of September 19, 2023).
Benefits of Investing in ASX Healthcare Shares
The healthcare industry is growing and notably contributing to Australia’s GDP. Compared with its regional and global peers, Australia has managed to evolve its position in terms of its private-public partnerships and adjusted private health spending per capita. The Australian stock market provides various healthcare stocks for their investing choices; therefore, an investor may achieve a variety of investing goals by buying healthcare stocks in different categories, such as high-growth or defensive shares, depending on their individual risk appetite and preferences. In the five-year period, the S&P/ASX 200 Health Care Index (ASX: XHJ) generated an absolute return of approximately 20.79%, which is comprised of 14 companies and is classified as a member of the GICS Health Care Sector.
Best Healthcare Stocks on the ASX of 2023
Here are some of the best healthcare ASX stocks, as follows:
Arovella Therapeutics Limited (ASX: ALA) has a market cap of $70.35 million and a current market price of $0.078 as of September 20, 2023. The stock has delivered a 1-year exponential return of approximately 189% (YTD as of September 20, 2023). It is an Australian biotech company that focuses on developing innovative therapies for oncology and central nervous system disorders. Their technologies include iNKT cell therapy and DKK1-CAR-iNKT, aiming to treat blood cancers and solid tumors. They also have approvals for Anagrelide in multiple regions and market ZolpiMist for short-term insomnia. Collaboration with Imperial College London enhances their research and development efforts.
Impedimed Limited (ASX: IPD) has a market cap of $343.19 million and a current market price of $0.17 as of September 20, 2023. The stock has delivered a 1-year exponential return of approximately 153.73% (YTD as of September 20, 2023). It is an Australian medical software technology company that specialises in bioimpedance spectroscopy (BIS) systems and software services. Their primary focus is on the early detection of lymphedema and heart failure. BIS measures tissue composition and fluid status in the body. ImpediMed's SOZO platform uses BIS to provide critical information for managing chronic diseases and promoting patient health. Their products include the SFB7 for measuring fluid and tissue, ImpediVET for veterinary applications, and SOZO applications like L-Dex Analysis for lymphedema, BodyComp Analysis, Segmental BodyComp Analysis, and HF-Dex Analysis for heart failure.
EZZ Life Science Holdings Ltd. (ASX: EZZ) has a market cap of $26 million and a current market price of $0.61 as of September 20, 2023. The stock has delivered a 1-year exponential return of approximately 133.33% (YTD as of September 20, 2023). It is an Australian genomics and precision nutrition company. It focuses on four health challenges, including genetic longevity, HPV, Helicobacter pylori, and weight management. EZZ formulates, markets, and distributes health supplements under the EZZ brand globally. It also wholesales skincare products under the EAORON brand in Australia and New Zealand. Its offerings encompass a range of health supplements and skincare items, catering to various market segments.
Clarity Pharmaceuticals Limited (ASX: CU6) has a market cap of $322.09 million and a current market price of $1.23 as of September 20, 2023. The stock has delivered a 1-year exponential return of approximately 92.19% (YTD as of September 20, 2023). It is an Australian clinical-stage radiopharmaceutical company specializing in theranostic (therapy and imaging) products. They utilize their SAR Technology platform to develop innovative solutions for diagnosing, staging, and treating various types of cancer. Their three key products are SARTATE (targeting SSTR2-expressing cancers like neuroblastoma and neuroendocrine tumours), SAR-bisPSMA (targeting PSMA-expressing cancers, particularly prostate cancer), and SAR-Bombesin (used to identify and select patients for subsequent treatment of GRPr-expressing cancers like breast and prostate cancer). Clarity Pharmaceuticals is actively involved in multiple clinical trials, addressing both common and rare/orphan indications of cancer.
Frequently Asked Questions (F.A.Q)
What is the best health stock to invest in?
Australia has proactive health care stocks; some of them are biotech companies that focus on developing innovative therapies for oncology and central nervous system disorders. Some are into medical software technology companies that specialize in bioimpedance spectroscopy (BIS) systems and software services and clinical-stage radiopharmaceutical companies specializing in theranostic. The following names are given to look at below:
Arovella Therapeutics Limited (ASX: ALA); Clarity Pharmaceuticals Limited (ASX: CU6); and EZZ Life Science Holdings Ltd. (ASX: EZZ)
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