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Tax troubles see RESMED/IDR UNRESTR shares slide

Shares in medical product manufacturer RESMED/IDR UNRESTR (ASX: RMD) also known as ResMed Inc were down 0.7% to $12.59 at the time of writing after hitting 52-week high territory to finish off April with a $12.68 closing price.

ResMed has been hit with a US$190.1 million tax bill for the period between 2009 and 2013 following an audit of the company and ResMed announced on Friday it would pay US$151.7 million in additional income tax and US$38.4 million in interest after an amended assessment by the ATO.

ResMed is fighting the claim, but has coughed up half the additional tax in the interim.

Morgans has an add rating on the stock at present while Citigroup is more reluctant given the risk from competitors in the sleep apnoea mask space.

But there is plenty of growth left on the cards with ResMed seeing great gains from its cloud-based patient management system Airview, with 7 million patients now connected.

Brokers who have weighed in on ResMed appear to prefer it to peers Cochlear Limited (ASX: COH) and CSL Limited (ASX: CSL) at present in terms of growth prospects, with Cochlear shares up 0.4% to $194.84 at the time of writing and CSL down slightly to $169.89.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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