We are smack bang in the middle of reporting season, and it’s been a particularly perky week for Australia’s listed healthcare sector, with many of the major healthcare and biotech companies releasing their highly-anticipated financial results.

Australia has long had a reputation for outperforming in the healthcare sector relative to our size and population. It has been made famous thanks to innovations like the bionic ear: Cochlear (ASX:COH) was founded in the early 1980s to commercialise the cochlear implant pioneered by Australian scientist Dr Graeme Clark.

CSL, Australia’s largest public healthcare company and the third-largest stock on the ASX behind Commonwealth Bank (ASX:CBA) and mining conglomerate BHP (ASX:BHP), was founded in 1916 as the Commonwealth Serum Laboratories, a government body focused on vaccines.

So it is no surprise, then, that the sector takes intense interest in such names during reporting season: their health — excuse the pun — is indicative of the health of the wider listed health and biotech industry.

CSL lit up the boards on Wednesday with a bumper $1.9 billion profit for the 2019 financial year, a 17 per cent increase on the prior year.

Shares hit as high as $235.66, an all-time high for the company, which closed at $4.67 on its first day on the ASX way back at the start of 1999.

Healthcare was by a long way the best-performing sector on the ASX on Wednesday thanks to that momentum, posting a 4.49 per cent gain for the day. Energy was the next best, at 1.32 per cent.

Ansell (ASX:ANN), most well-known for making condoms but also protective plastic gloves, reported mixed results on Monday, with revenue rising slightly but overall profit well down.

Morgans’ expert team of healthcare analysts rated both CSL and Ansell’s results as mixed, though as one of their analysts Scott Power pointed out, the market reacted positively.

“We think CSL is fully priced at the moment, but it is a great core holding for clients, and the market clearly liked the results,” he told Stockhead.

“What the market is looking for with the big health companies is confirmation that they will continue to deliver solid growth, and that’s what we saw with CSL.

“There are also some big stories still to come, with Pro Medicus (ASX:PME), Invocare (ASX:IVC) and Cochlear reporting this week and Ramsay (ASX:RHC), Healius (ASX:HLS) and Resmed (ASX:RMD) all coming before the end of the month.”

Power said stability at the top end of town — the aforementioned companies all have market caps in excess of $1 billion — bodes well for the middle and smaller end of the market.

“People and companies gain confidence from positive results and that begins to trickle down to the smaller players,” he said.

“The market is looking for sustainability of growth in what is now a low-growth world. If you can deliver growth, that’s attractive.”

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