It's been a remarkable month or so for sleep apnea device maker ResMed Inc. (CHESS) (ASX: RMD). Since falling as low as $4.72 in mid-April, the shares have skyrocketed more than 15% and are currently sitting at $5.45. In the same time, the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has risen just 2.8%.
Despite the strong rise, you would be wrong to put ResMed in the "too late" pile. Rather, I believe now is still the perfect time to be buying! Here are three reasons why…
- Although the shares aren't cheap as such, trading on a P/E ratio of 21.3, the company has grown its revenue every single quarter since listing in 1995. It's hard to beat that for consistency.
- ResMed generates most of its revenue from the Americas, so a declining Australian dollar over the long-term will prove beneficial for the company's overall earnings. In comparison, Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) (which offers a similar product) is facing strong foreign currency headwinds.
- The occurrence of sleep apnea is increasing amongst the population – particularly with the rate of obesity increasing. In fact, some estimates suggest up to 3-9% of women and 10-17% of men in the US suffer from sleep apnea, which indicates that demand for ResMed's products should remain strong for years to come.