Australian Investment Blog

ASX:RMD 03/08/2018

Resmed lower on a slightly drowsy quarter

Stock

Resmed (RMD) $14.21 at 3/8/2018

Event

Resmed today announced their 4^th quarter and full year results, with the full year coming in as a slight miss to consensus on the revenue and EBITDA lines however it was a beat at the profit line. The respiratory and sleep disorder company is all about growth, so the revenue line here is important – for FY18 it grew by 12% which is a strong number for the year however the currency added around 2% of the gain. On a forward PE of 29.3x with the market expecting +9.5% growth in sales in FY19, RMD is in the expensive bucket.

Resmed (RMD) Chart Resmed Chart

Market Matters Take/Outlook

RMD, like both CSL and COH (Cochlear), has powered to all-time highs this month as the combination of unbridled optimism and tailwinds from a weak $A sends investors to the one sector they remain totally comfortable. This could spell danger when this trade has to unwind! RMD is also trading on a “rich” P/E but we do like the direction of the sleep and respiratory healthcare business as it works to grow reoccurring revenue streams with sales across Asia, Europe and the US. We would be interested in RMD around $12

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