The Motley Fool

ResMed Shares Plunged: What You Need to Know

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of ResMed Inc. (ASX:RMD) had a rough day yesterday falling 14% after the company released earnings.

So what: Third-quarter revenue grew 12% to $US314.8 million but fell well short of the $US327.9 million in revenue analysts were expecting. On the bottom line, earnings fell 11% to $US0.33 per share, $US0.02 below estimates.

Now what: A weak U.S. dollar relative to the euro and Australian dollar was blamed for some of the shortfall, but it looks like expectations were much too high. Declining profit is never a good sign, and I would be cautious jumping on shares right now. The stock’s price/earnings multiple of 19 times trailing earnings will look very expensive if the lower earnings trend continues.

Founded in Australia, ResMed is dual listed on NYSE and the ASX. ResMed reports in U.S. dollars.

Are you looking for more quality stock ideas? Readers need look no further than The Motley Fool’s Top Stock For 2012. Click here now to request this special report, whilst it’s still free and available.

One ASX Stock For An Estimated $US22 Billion Marijuana Market

A little-known ASX company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming. To the tune of an estimated $US22 billion.

Cannabis legalisation is sweeping over North America, and full legalisation arrived in Canada in October 2018.

Here’s the best part: we think there’s one ASX stock that’s uniquely positioned to profit immensely from this explosive new industry… taking savvy investors along for what could be one heck of a ride.

AND, this is the first time The Motley Fool Australia has EVER put a BUY recommendation on a marijuana stock.

Simply click below to learn more on how you can profit from the coming cannabis boom.

Click here to find out more