Company Review Thursday · Healthcare · ResMed

Company Review Thursday: ResMed Inc.

Sleep is important. Crown me Captain Obvious for this, but when we sleep our bodies are resting, repairing and recharging. Not getting adequate sleep shows up in so many facets of life including the physical dark circles around your eyes to the perpetual state of fatigue. If we aren’t breathing well while we sleep, the problems compound and serious health problems could surface as a result. Sleep apnea and snoring are issues that could arise when breathing while asleep is inhibited by the tissue in the back of your throat. Unfortunately, over the past couple years the reported number of sleep apnea cases has increased so products designed to treat sleep apnea and other chronic respiratory problems are in demand. This specific demand is where ResMed Inc. focus it’s efforts.

Company Snapshot Yahoo! Finance Data)
Name:  ResMed Inc.
Ticker: RMD
Current Price: $59.46(as of 4/14/2016)
52 Week High Price:$74.14
52 Week Low Price: $48.99
Market Capitalization: $8.37B (Large Capital)
Price/Earnings (P/E Ratio): 24.29
Earnings/Share (EPS): $2.46
Dividend: $1.20/year (2.05% yield)
Industry: Healthcare
Primary Business: Medical Appliances & Equipment

The Good, The Bad and The Ugly

Investing in healthcare is kind of a double edge sword to me sometimes. Knowing that the demand for the products created by pharmaceutical companies or equipment manufacturers is growing at such a high rate is a concern for me. Prices of the prescriptions drugs and treatments that people need to live quality lives are high so healthcare has almost become a luxury rather than a right. Companies have a responsibility to their shareholders to generate revenue, but they also have a responsibility to the people who use their equipment or drugs. They have to make them affordable to make living healthy and comfortable lives a standard and not a privilege.

But outside of my general concern for human rights in healthcare, ResMed Inc. seems to genuinely work for their customers. They create software applications that help their customers keep track of progress in sleep patterns and give them directions on how to improve their experience with the sleep treatment down the road. With the acquisition of Brightree, it looks like ResMed is all for adding to their plethora of software applications to keep track of customers using their devices. Because they are seemingly bent on growth and expanding internationally given the demand for their products, the company will continue to spend to acquire companies that are aligned with their vision for the future. It kind of puts me in the mind of 3D Systems in the 3-D printing space as far as bringing all these different type of solutions under one umbrella. Eventually ResMed wants to be able to compete on pricing better here in the U.S. as insurance companies are pressuring medical product manufacturers to lower their prices.

Overall, this may be a speculative purchase on my part, but I think it will at least reach its 52 week high once again. If it only reaches $67/share, I think I’ll still be satisfied.

Until next post folks…

*Nothing in this post is any type of advice. Just giving my perspective on this company*

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