The Australian share market is home to a number of world class healthcare companies such as Ramsay Health Care Limited (ASX: RHC) and Cochlear Limited (ASX: COH).

While I believe both companies still have a lot of growth left in them, the law of large numbers would indicate that the impressive growth rates they have achieved over the last decade or two will be hard to replicate in the future.

So, if you’re looking for outsized returns in the healthcare sector, you might want to look at a few up and coming healthcare companies that could be stars of the future.

Three small cap healthcare shares that I think are worth watching closely are listed below:

Mach7 Technologies Ltd (ASX: M7T)

The first small cap healthcare share to look at is Mach7. It is a medical imaging data management solutions provider which uses software to create a clear and complete view of the patient. This helps inform diagnosis, reduce care delivery delays and costs, and improve patient outcomes. The company has also just expanded its offering with the acquisition of Client Outlook. It is a leading provider of an enterprise image viewing technology and increases Mach7’s total addressable market from US$0.75 billion to US$2.75 billion. This is significantly more than the revenue of $9.1 million it recorded during the first half. 

Medadvisor Ltd (ASX: MDR)

A second small cap healthcare share to watch is this healthcare technology company. Medadvisor has a focus on personal medication adherence and offers an app that connects to pharmacy dispensing systems. It has been designed to ensure correct and reliable medication use. In Australia it has connected over one million users through nearly 60% of Australian pharmacies and a network of thousands of GPs. In addition to this, the company is operating in the United States, Asia, and UK markets.

Volpara Health Technologies Ltd (ASX: VHT)

A final small cap ASX healthcare share to watch is Volpara Health Technologies. It is a growing technology company that offers cost-effective, mission-critical software that help radiologists deliver the highest-quality breast imaging services. Volpara’s software also uses artificial intelligence imaging algorithms to assist with the early detection of breast cancer. Management estimates that it currently has a US$750 million annual recurring revenue (ARR) opportunity in breast cancer screening. This compares to the ARR of NZ$18 million it recorded in FY 2020.

More reading

• 2 ASX healthcare shares to buy for long-term growth
• 3 fantastic ASX 200 shares to buy right now
• Ramsay Health Care and 1 other ASX share I would buy for both growth and income
• Why you should watch these ASX small cap shares closely in the 2020s
• Insiders have been buying these ASX 200 shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd., MACH7 FPO, MedAdvisor, and VOLPARA FPO NZ. The Motley Fool Australia has recommended Cochlear Ltd., MedAdvisor, Ramsay Health Care 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.

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The S&P/ASX 200 Index (ASX: XJO) jumped almost 4% today, it rose to 5,942 points.

The share market is rebounding again as the US Federal Reserve moved to start buying individual corporate bonds to add liquidity to the market.

The best ASX 200 performer

The strongest growth in the ASX 200 today came from Viva Energy Group Ltd (ASX: VEA). The share price went up by 15.5% after it announced profit guidance and gave a business update.

Viva Energy said that the group underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half of FY20 is expected to be approximately $257.5 million to $287.5 million.

The underlying net profit after tax (NPAT) is expected to be approximately $20 million to $50 million.

The ASX 200 business said that the announced on-market share buyback will commence in June 2020.

The company is going to proceed with its major maintenance of the residual catalytlic cracking unit during 2020 at a reduced cost and over an extended timeframe, with total capital expenditure of the event expected to be between $85 million to $100 million, down from $110 million to $140 million previously.

Total sales volumes for the first half of FY20 are expected to be approximately 6,100 million to 6,200 million litres. However, this has been offset by cost reductions and improvements in retail fuel margins.

Volatile shares jump higher

A number of volatile ASX shares bounced back today.

The Webjet Limited (ASX: WEB) share price rose by 11.4%. EML Payments Ltd (ASX: EML) saw its share price grow by 11.4%. The Afterpay Ltd (ASX: APT) share price climbed 10.5%. Zip Co Ltd (ASX: Z1P) experienced a 9.5% share price rise of. The Challenger Ltd (ASX: CGF) share price jumped 10%. The Flight Centre Travel Group Ltd (ASX: FLT) share price grew 7.8%.

According to the ASX, there were only two shares that fell in the ASX 200. The Saracen Mineral Holdings Limited (ASX: SAR) share price dropped 0.9% and the Pro Medicus Limited (ASX: PME) share price dropped 0.4%.

Pharmaceutical supply agreement

The pharmaceutical industry announced some positive news today. The government and health department has reached an agreement about an additional $92 million of funding through the community service obligation (CSO) as well as an introduction of a floor price to continue to support medicine supply through the wholesaler network over the next five years.

This new funding is effective from 1 July 2020. Both Australian Pharmaceutical Industries Ltd (ASX: API) and Sigma Healthcare Ltd (ASX: SIG) are part of the National Pharmaceutical Services Association (NPSA) industry body which made the announcement. The API share price went up more than 5% today. The Sigma share price also climbed 5% today.

Special dividend and capital return announced by Orora Ltd (ASX: ORA)

ASX 200 packaging business Orora held an extraordinary general meeting (EGM) today to approve a capital return and share consolidation. Both of these items were approved in the meeting today.

The sale of Orora’s Australasian fibre business to Nippon Paper Industries for $1.72 billion resulted in net proceeds after tax and costs of approximately $1.55 billion.

The Orora board decided that best thing to do with $600 million of that capital is to return it to shareholders. A special dividend of $450 million is the main element of the plan, which equates to 37.3 cents per share, partially franked at a rate of 50%.

The other $150 million will be delivered to shareholders by way of a capital return. It will be a cash payment of 12.4 cents per share. This was payment approved today at the meeting. The special dividend and capital return will be paid to shareholders on 29 June 2020.

The company now has little to no debt. The directors said they’d prefer the remaining proceeds are used for potential growth investment opportunities. However, if no opportunity is found then directors will consider an additional return of excess capital to shareholders.

More reading

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• Why I think this ASX 200 rally is fake

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Challenger Limited, Pro Medicus Ltd., and Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Emerchants Limited and Flight Centre Travel Group Limited. 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.

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The Rox Resources Limited (ASX: RXL) share price was a standout performer on the ASX today after the company announced a high-grade gold hit at one its mines.

This announcement saw the Rox Resources share price more than double, with shares closing 108.33% higher at 5 cents. This jump takes the company’s current market capitalisation to around $91 million.

Rox Resources is an emerging Australian minerals exploration company, with advanced gold and nickel projects in Australia.

The company owns a 70% interest in the Youanmi Gold Mine, and wholly-owns the Mt Fisher Gold Project, Fisher East Nickel Project and Colluabbie Nickel Project, all located in Western Australia.

What did Rox Resources announce?

This morning, Rox reported further results from the drilling program being undertaken at the Grace prospect at Youanmi. The current drill program commenced in late May and assay results have now started to flow in.

Rox stated that deepest drilling completed at Grace has intersected impressive gold grades, including:

• 25 metres at 34.79 grams per tonne (g/t) gold from 143 metres, including:
  • 6 metres at 140.7 g/t gold from 150 metres.

According to the company, this was the deepest intercept to date, extending mineralisation both along strike and down-dip.

Commenting on the drilling results, managing director Alex Passmore said:

“These very impressive results are the best we’ve seen and significantly, are from the deepest drilling at Grace to date. The exploration model we are applying at Grace is continuing to work well, delivering what is shaping up to be a substantial high-grade deposit. We look forward to updating the market on further assays as they become available.”

Recent developments

Today’s announcement follows Rox’s share placement and share purchase plan (SPP) recently undertaken to raise $12.7 million. In late May, the company completed a $8.74 million institutional placement at an offer price of 2.4 cents per share. And yesterday evening, Rox announced it has closed its SPP over-subscribed, accepting a total of $4 million.

The funds will be used to underpin the company’s growth plans at the Youanmi Gold Mine and Fisher East Nickel Project. Additionally, Rox has used some of the capital to increase its interest in the Youanmi joint venture from 50% to 70%. As announced on 11 June, the company exercised its option to acquire an additional 20% interest in the joint venture for $2 million cash and $1 million in shares.

The company’s joint venture partner for Youanmi, Venus Metals Corporation Limited (ASX: VMC), also saw its shares rise today, notching a 38.24% gain.

More reading

• 3 exciting small cap ASX healthcare shares to watch
• ASX 200 jumps almost 4%, Webjet share price soars
• Why I would buy CSL and these ASX blue chip shares
• 2 ASX healthcare shares to buy for long-term growth
• Top brokers just upgraded these ASX 200 shares today

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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