Sharechat Logo

Daily ShareChat: ResMed

Thursday 5th August 2010

Text too small?

ResMed, which is market leader in the obstructive sleep apnea (OSA) products market, has proved itself as an enduringly high growth business over the last 15 years, says James Cooper, an analyst at Aegis Equities Research.

"An attractive feature is a large untapped market." About one in five adults have some form of OSA but only 10% are diagnosed in the US and even fewer elsewhere, Cooper says.

"While US reforms will aim to contain healthcare spending, ResMed should be a beneficiary of the focus on preventative care as sleep-disordered breathing (SDB) therapy may help reduce some chronic diseases, thereby cutting long-term costs," he says.

Nevertheless, "we are not sure that such economic benefits are sufficiently explicit for SDB products to avoid the budget knife."

The Australian and New York-listed ResMed is estimated to have between 40% and 50% of the estimated US$2.2 billion (NZ$3.03 billion) OSA treatment market while New Zealand-based Fisher & Paykel Healthcare Corporation has about 7%.

ResMed's earnings-per-share have a record of strong growth followed by consolidation. "After a period of impressive growth and a strong outlook due to the success of new products, the share price has run well ahead of our A$6.25 valuation," Cooper says.

Recommendation: Reduce.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Skellerup achieves another record result
August 21st Morning Report
Me Today signals capital raise and provides trading update
Seeka Announces Interim Result and Updates Guidance
FBU - Fletcher Building announces FY25 Results
August 20th Morning Report
RUA - New Zealand grown products support Rua's global strategy
Devon Funds Morning Note - 19 August 2025
Seeka Announces 15 cent Dividend
MCY - Major renewable build advanced despite 10% earnings dip