ResMed Inc (ASX: RMD) shares have created plenty of shareholder wealth so far in 2024, climbing nearly 46% in the year to date.
And now, according to mandatory disclosures filed with the ASX this week, one insider looks to have cashed in on some of these gains.
ResMed shares are in vogue with brokers who are bullish on the ASX healthcare stock. Let's take a closer look.
Image source: Getty Images
Insider sells ResMed share
According to filings lodged with the ASX and US Securities and Exchange Commission (SEC) on Friday, Resmed founder Peter Farrell this week offloaded a large line of shares via ResMed's US-listed issues.
Farrell sold 2,000 shares on Wednesday for US$245.65 per share, collecting gross proceeds of US$497,831.
At current USD/AUD exchange rates, this tallies more than AUD$774,000.
The filings show the transaction was conducted under a pre-arranged Rule 10b5-1 trading plan established earlier in May 2024. This can be used by insiders who receive equity as compensation.
According to Investment bank William Blair, an insider "who has established a 10b5-1 plan may make trades of that security outside the plan, depending on the internal insider-trading policy of the issuer".
Farrell has been reducing his holdings over the last three months, selling a total of 6,000 shares in that time.
So, while such sales can indicate insider sentiment, it's important to note that Farrell's sales appear to be part of a structured divestment strategy rather than a sudden response to market conditions.
As of this latest sale, he retains ownership of 81,218 ResMed shares.
Investors, brokers are bullish
The Selector High Conviction Equity Fund is bullish on ResMed shares for FY25 and had a 24% weighting toward the company in its portfolio as of September 30.
It says ResMed is well placed to benefit from the new market for wearables that track your sleep, similar to other wearable health-monitoring devices.
ResMed also remains a favourite among analysts, with the consensus of analyst estimates rating it a moderate buy, according to CommSec.
Macquarie was bullish on the stock in October, with a $41.40 per share price target.
Ord Minnett also has a bullish stance and values the stock at $40.05 apiece. It likes the company's competitive advantages in the sleep apnea market.
Baird also rates the stock a buy due to the same reasons, saying that "mid-teens" earnings growth is highly likely for ResMed in 2025.
Foolish takeout
Farrell's sale of $765,000 worth of shares likely has no relation to ResMed's fundamentals. Filings show they were part of a pre-approved plan from May.
Investors are wise to consider the broader picture and think long-term regarding ResMed's financial growth, market-leading position, and earnings outlook.
In the last 12 months, the ResMed share price has gained 50%.
