Health care players RMD and CSL stock prices close to their 52-week high levels

  • Jun 29, 2020 AEST
  • Team Kalkine
Health care players RMD and CSL stock prices close to their 52-week high levels

Summary

  • Recognised as one amid the best in the world, Australian health care system is facing a sea of opportunities amid coronavirus. Subsequently, many health care related companies are busy providing sanitisers, gloves, masks, etc, while many are working towards developing a vaccine.
  • Robust mask and device product sales of RMD during March 2020 quarter delivered strong revenue growth in various segments such as the U.S., Canada, Latin America, Europe, and Asia.
  • In June 2020, CSL gave its nod to obtain exclusive global license rights from uniQure to commercialise AAV gene therapy program, AMT-061 to treat haemophilia B. After obtaining regulatory approvals, the therapy would provide support to CSL’s current product portfolio of the disease.

Worldwide, Australian health system is known as one of the best, in terms of offering reasonable and secure health care for people. As per Australian Industry and Skills Committee, the health care industry is one of the leading employing industries of Australia with around 1.7 million individuals employed during 2019.

As a result of the currently evolving health crisis “COVID-19”, it has created a range of opportunities for the industry. Most of the companies are involved in the production of items such as gloves, hand sanitisers and masks, etc. While some of the entities are involved in developing a vaccine for COVID-19.

Do Read: Is COVID-19 vaccine underway?

During past few months, investors have shown a greater confidence in the health care industry and injected a lot of money in it. As a result, some of the companies currently are trading near to their 52-week high levels. Hence, considering the backdrop, we would now look at two such ASX-listed health care stocks.

ResMed Inc

ResMed Inc (ASX:RMD) is a pioneer in providing innovative solutions, which treats and keep people away from hospital, empowering them to live healthier and higher-quality lives. The Company is a world leader in management of Sleep Apnea & COPD.

Last month, RMD updated the market with the operational and financial performance for the quarter ended 31st March 2020 and outlined the following:

  • ResMed reported revenue amounting to $769.5 million, reflecting a rise of 16%. Revenue from U.S., Canada, and Latin America segment, excluding Software as a Service went up by 12%. This was generated by strong sales throughout its mask and device product portfolios, which includes increased demand for its ventilators because of COVID-19.
  • Moreover, revenue in combined Europe, Asia, and other markets increased by 27% on a CC (constant currency) basis.
  • Continued growth in Brightree and MatrixCare service offerings assisted the Company to deliver 12% growth in Software as a Service revenue.
  • Selling, general, and administrative expenses for the period went up by 5% or by 7% on a CC basis.
  • During the quarter, the cash flow from operations stood at $239.7 million, against net income in the current quarter of $163.1 million. RMD has paid $56.4 million in dividends during the quarter.

Do Read: How these healthcare players are performing amid pandemic?

Source: Company's report

Future Growth:

  • The Company continues to implement its long-term strategy, which is supporting customers around the world with digital health technologies, as well as out-of-hospital management software.
  • RMD is optimistic about its ability to sail through the current challenging clinical and economic environment to deliver for all its shareholders. The Company is well-placed by its culture, operational resilience, strong balance sheet, business continuity plans, as well as growth prospects.
  • ResMed is vigilant and thoughtful about the outlook of its business as it continues to serve its customers and successfully weather the crisis in the near term.
  • The Company believes that its strong foundation would ramp up the adoption of much-needed digital health solutions in the field of respiratory medicine over the longer duration.

At the close of session, the stock of RMD stood at AU$27.030, with a fall of 0.479% as on 29th June 2020. The market capitalisation of RMD stands at AU$39.34 billion. The stock of RMD is inclined towards its 52-week high levels of AU$27.310. RMD has generated returns of 19.02% and 21.36% during the last three months and six months, respectively.

CSL Limited

CSL Limited (ASX:CSL) is engaged in the research, development, manufacture, marketing and distribution of biopharmaceutical and allied products.

Acquisition for Future Growth:

In recent times, the Company announced acquisition of some businesses, who are likely to contribute in CSL’s growth:

  • On 25 June, CSL announced that it has agreed to acquire exclusive global license rights from uniQure to commercialise an adeno-associated virus (AAV) gene therapy program, AMT-061 for the cure of haemophilia B.
  • As per the terms of the agreement with uniQure, CSL would have the exclusive global right to commercialise AMT-061 and uniQure would be receiving an upfront cash payment of US$450 million on the completion of the transaction.
  • As per the release dated 9th June, the Company announced the acquisition of Vitaeris Inc. It is a clinical-stage biotechnology entity, dedicated towards the phase III development of a treatment for rejection in strong organ kidney transplant patients.
  • The Company added that the cost of acquisition is modest, and it does not materially change CSL’s profit anticipation for financial year 2020.

Recently, the company has priced new private placement of US$750 million. This new private placement has a weighted average interest rate of 2.68% and an average life of 11.5 years. The company would use the proceeds from the new debt raisings for general corporate purposes. 

Do Read: A look at business update of healthcare gaint.

During 1H FY20, for the period close 31 December last year, the Company generated strong profit growth with reported net profit after tax amounting to US$1,248 million, reflecting a rise of 11% on constant currency basis.

This indicated (1) solid increase in immunoglobulin products, (2) switch to own distribution model in China developing properly (3) continuous evolution of the haemophilia therapies portfolio, and (4) another robust performance from seqirus influenza vaccines business.

At the close of market session, CSL stood at AU$289.560, with a fall of 1.086%, as on 29th June 2020. The market capitalisation of the CSL stands at AU$132.92 billion. CSL is inclined towards its 52-week high levels of $342.750. The stock of CSL has generated returns of 3.06% and 4.39% during the last three months and six months, respectively.

 


Disclaimer
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK