Why Fisher & Paykel Healthcare Corp Ltd (ASX:FPH) shares surged to an all-time high today

The market may have dropped lower again today, but that hasn’t stopped the Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price from storming to an all-time high.

Its shares rose as much as 4.5% to a new high of $14.49 before closing the day 4% higher at $14.42 on the day of its annual general meeting.

The sleep treatment company used the event to announce the launch of a new product and an upgrade to its full year guidance.

The new product.

Fisher & Paykel Healthcare has launched a new neonatal respiratory care device, the F&P 950 Heated Humidification System.

The company decided to release the new product following the successful launch of the adult system version in 2016.

Things certainly do look positive for F&P 950. Management advised that the feedback it received from nurses during clinical trials was overwhelmingly positive, principally in terms of ease of use and performance.

According to the announcement, the company believes that the “introduction of Thermadapt technology, in which the circuit automatically adjusts its temperature according to the baby’s current environmental condition – ambient, warmer or incubator – is a stand out feature that makes it very easy for nurses to set up and operate.”

The neonatal circuits for the F&P 950 System are currently available in the ANZ region and will be rolled out to other countries over the next few years. This could give its earnings a little boost, not that the company needs much help in that regard.

Upgraded guidance.

Fisher & Paykel Healthcare has had a strong start to FY 2019 and, based on current exchange rates, expects first half operating revenue to be approximately NZ$510 million and net profit after tax to be approximately NZ$95 million.

For the full year the company expects operating revenue to be approximately NZ$1.07 billion and net profit after tax to be approximately NZ$215 million, this compares to its previous guidance of NZ$1.05 billion in revenue and profit of NZ$210 million.

If the company achieves this guidance it will mean growth of 9.1% and 13% on last year’s revenue of NZ$980.8 million and profit after tax of NZ$190.2 million.

Should you invest?

While my preference remains industry rival ResMed Inc. (ASX: RMD), I do think that Fisher & Paykel Healthcare could be worth a closer look. Though, with its shares now at an all-time high, investors may want to hold out for a pullback in its share price.

Alternatively, fellow healthcare star CSL Limited (ASX: CSL) could be a great option for investors seeking exposure to the sector.

As well as Fisher and Paykel, ResMed, and CSL, I think these growth shares could be great options for investors in FY 2019.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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