The Motley Fool

Up 41% in 2018: Is it too late to buy ResMed Inc shares?

The market may be sinking lower today, but that hasn’t stopped the ResMed Inc. (ASX: RMD) share price from continuing its impressive run.

In afternoon trade the medical device company’s shares are up around 0.5% to $15.23.

This small gain means that ResMed’s shares have stretched their year to date return to almost 41%.

Is it too late to invest?

I don’t believe it is if you are prepared to make a buy and hold investment.

I was very impressed with the company’s performance in the September quarter, which has traditionally been its weakest quarter.

Revenue for the quarter grew by 12% over the prior corresponding period to US$588.3 million and, thanks to the company’s operating leverage continuing to impress, income from operations rose 28% to US$144.1 million.

Management also advised that its growth strategy is being implemented successfully, putting it on target to achieve its long-term goal of changing 20 million lives by 2020.

All in all, I believe this has positioned the company to continue its above-average earnings growth for the foreseeable future, potentially making it a great investment option today.

One broker that agrees is Credit Suisse. A note out of the investment bank today reveals that it has retained its outperform rating and lifted the price target on ResMed’s shares to $16.10 following the acquisition of Propeller Health for US$225 million.

Credit Suisse is pleased that the acquisition provides a data platform for chronic obstructive pulmonary disease, which is something that had been lacking from its portfolio in the past. Another positive is that the broker also expects the acquisition to broaden its customer base.

I agree with this view and think investors ought to consider picking up its shares along with fellow healthcare stars Cochlear Limited (ASX: COH) and CSL Limited (ASX: CSL).

NEW. The Motley Fool AU Releases Five Cheap and Good Stocks to Buy for 2020 and beyond!….

Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading over 40% off it's high, all while offering a fully franked dividend yield over 3%...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.


Motley Fool contributor James Mickleboro 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.