ResMed (RMD) Hits Fresh 52-Week High on Portfolio Strength - Analyst Blog

Shares of ResMed Inc. ( RMD ) attained a new 52-week high of $57.57 in mid-day trading on Dec 26. The bullish run reflects the company's increased focus in international markets, an innovative product pipeline and satisfactory first-quarter fiscal 2015 results.

The company's shares eventually closed at $57.36 on the day, translating into a decent one-year return of around 22%. The year-to-date return on the stock is also roughly 22%. Currently, this San Diego, CA-based company pioneering in sleep and respiratory disorder related medicines has a market cap of $8 billion while average volume of shares traded over the past one day is roughly $0.3 million.

Over the last few months, the company has launched a series of products and expects to follow them up with additional ones in calendar year 2015. Plans for further international expansion, particularly in Europe and Asia-Pacific, are also on the cards. We believe this will help ResMed to enhance its market reach overseas, ushering in more profitability in the coming quarters.

Recently, ResMed launched the AirCurve 10 series platform in the U.S.; to provide personalized treatment to patients suffering from sleep apnea, including those afflicted with central sleep apnea or Cheyne-Stokes respiration. Last month, the company launched the world's first non-contact personal sleep monitoring device - S+. ResMed integrated S+ with Apple Healthkit in iOS8, thus allowing Apple users to track, share and improve their sleeping habits.

More recently, ResMed won a patent infringement lawsuit against Chinese medical device manufacturer, BMC Medical. Accordingly, the latter has been prohibited from selling some of its nasal masks in the U.S. market.

Meanwhile, the company reported decent first-quarter fiscal 2015 results, with earnings of 58 cents per share ahead of the year-ago equivalent by 3.6%. However, the bottom line was merely on par with the Zacks Consensus Estimate. On the other hand, revenues increased 6.4% year over year to $380.4 million, exceeding the Zacks Consensus Estimate of $376 million.

ResMed repurchased 835,000 shares for $42.9 million, as part of its ongoing capital management program and currently has 17.4 million shares remaining under its authorized buyback program. The continuous return to shareholders reflects ResMed's confidence in its fundamentals.

In bilevel range of devices, ResMed expects to launch the AirCurve 10 platform in the key global markets in the coming quarters of fiscal 2015.

At present, ResMed is expanding its digital informatics offerings by increasing the connectivity from Air Solutions ecosystem to the informatics ecosystems. According to management, ResMed's new product release schedule will remain active across both mask and flow generator categories.

Currently, ResMed carries a Zacks Rank #2 (Buy). Some other medical product stocks worth considering are ICU Medical, Inc. ( ICUI ), OraSure Technologies, Inc. ( OSUR ) and Smith & Nephew plc ( SNN ). All the three stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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