One of the best performers on the ASX 200 in 2018 has been the ResMed Inc. (ASX: RMD) share price.
Year to date the sleep treatment-focused medical device company's shares have risen a massive 46%.
Why is the ResMed share price up 46% this year?
There have been a few catalysts for ResMed's strong share price performance in 2018.
The key catalyst is the company's impressive performance in FY 2018 and its equally positive start to FY 2019.
In FY 2018 ResMed posted a 13% lift in revenue to US$2.3 billion and a 27% increase in net income to US$507.8 million. This was driven by an increase in unit sales of its devices, masks and accessories, partially offset by a decline in average selling prices.
This strong form has been carried over into FY 2019 with the company recently reporting a 12% increase in quarterly revenue to US$588.3 million and a 23% increase in net income to US$105.7 million.
Another catalyst has been a series of acquisitions that the company has made this year that look set to boost its future growth. These include leading long-term post-acute care software provider MatrixCare and connected health company Propeller Health.
And the final catalyst has been the decline in the Australian dollar. ResMed's ASX listed shares are actually chess depositary instruments that trade on the local market and represent a tenth interest in its primary NYSE listing. As that listing is in U.S. dollars, favourable currency movements will lead to rises in ResMed's ASX listed shares.
Should you invest?
Despite its strong gain this year, I still feel that ResMed would be a great long-term investment alongside healthcare peers Cochlear Limited (ASX: COH) and CSL Limited (ASX: CSL).
After all, although it is generating significant profits already, management believes the sleep and related respiratory care markets are globally underpenetrated. I agree with this and believe ResMed has a long runway for growth ahead of it.
