ResMed Inc. (ASX: RMD) Trading At A High Of 40 Percent YTD

RMD

ResMed Inc. (ASX: RMD) is a leading connected health company which provides cloud connected health care services and devices to the patients across 120 countries. The company was started in 1989 and based out of San Diego, US. It has an employee base of 6000 employees providing software solutions and devices to treat sleep apnoea, chronic obstructive pulmonary disease and other respiratory conditions.

On 25 October 2018, the company announced its first quarter results of FY19 ended 30 September 2018. The company has shown encouraging growth as revenue for the quarter has gone up by 12 percent as compared to prior corresponding period to $588.3 million, also the net income has increased by 23 percent when compared to Q1 in FY17 to $105.7 million.   

The company has completed the acquisition of HEALTHCAREfirst, which is a software solutions and service provider for home health and hospice agencies. The acquisition was completed in the first quarter of FY19 at a consideration of $126.3 million. Also, the company has recently announced the dividend of 3.563 cents with a pay date of 13 December 2018.

The group is gearing up for establishing a broader customer base with better product portfolio and the latest acquisition of MatrixCare (as highlighted by the group) will help RMD in expanding the Software as a service offerings across medical device industry. Meanwhile, some investors have raised concerns over the premium paid for the transaction (US $ 750 million).

Coming to returns scenario, the group is also trying to maintain decent dividends since 2016. The earnings per share of the stock has been around 0.299 AUD and the group aims to improve the figure based on the recent developments.

As of today, the company’s shares traded at A$15.22, which is close to the 52-week high of A$16.04 and the stock has a market capital of circa A$21.62 billion as on 5 December 2018 (AEST 4:00 PM). In last six months, the share price of the company has increased by 10.81 percent and traded at a PE ratio 50.720x, which is at a higher level when compared with its key competitors.

Since its inception, the share price of the company has increased by 465.68 percent. In last 10 years, the share price has increased by 454.97 percent. In the last 5 years, the share price has grown by 185.15 percent and in the last one year it has increased by 37.29 percent. However, in the last 3 months, the performance of the share price has been in negative 2.38 percent. But since the last one month it has increased by 3.69 percent.

Hence, considering that the company’s shares are trading closer to its high point and also at a higher level than its competitors in the industry in the recent times, we believe that the stock can be watched for the right investment opportunity in the near future while RMD is trying to set its growth prospects in the right direction.


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