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Here's Why You Must Add ResMed (RMD) to Your Portfolio Now
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ResMed Inc. (RMD - Free Report) has been gaining investor confidence on consistently positive results. The stock has gained 11.3% over a year, versus the S&P 500’s 3.8% decline and its broader industry’s 0.9% fall.
Moreover, the company has a market cap of $11.91 billion. Its five-year historical growth rate is also favorable at 9.3% compared with the industry’s 5.7%.
Considering the solid prospects, this Zacks Rank #2 (Buy) stock is an attractive bet for investors at the moment.
Factors Acting in Favor
Let’s take a look at the possible growth propellers:
Solid Q2 Performance
ResMed exited the second quarter on a promising note with better-than-expected earnings and revenues. We encouragingly note that the company achieved solid double-digit revenue growth in the quarter, led by sales from Software-as-a-Service businesses as well as its new mask products and devices.
Growing International Business
In the second quarter of fiscal 2018, revenues at the United States, Canada and Latin American countries grew low double-digits year over year. Europe, Asia and other markets grew mid double-digits. Growth was particularly strong in France, the U.K., Japan as well as Australia and New Zealand. Mask sales internationally were impressive, reflecting strong adoption of F20 and N20 mask products.
Notably, ResMed continues to invest and expand its presence in high growth markets like China, South Korea, India, Brazil and many countries in Eastern Europe.
Solid Three-Horizon Growth Strategy
ResMed has identified three horizons for growth. In terms of progress in the first horizon, which focuses on ResMed’s core sleep apnea franchise, the company has been making advanced technology combined with digital health and connected care solutions.
The second horizon is growth in adjacent product and geographic markets, including homecare ventilation for Chronic Obstructive Pulmonary Disease, Amyotrophic Lateral Sclerosis and other respiratory disorders. In this regard,the company also recently informed about its first self-branded portable oxygen concentrator — Mobi — subject to a fiscal third-quarter launch. In the fiscal first quarter, the company re-launched the portable oxygen concentrator called Activox. The company is also focusing on growing in emerging markets like China, India and Brazil.
The third growth horizon incorporates a portfolio of opportunities in new markets, including clinical adjacencies such as atrial fibrillation, heart failure with preserved ejection fraction, asthma, chronic disease management as well as sleep health and wellness.
Focus on Product Development
In order to maintain its leadership position in the SDB market and drive sales, ResMed is focusing on product development and innovation. In this regard, the company launched AirTouch full face mask in the United States in the fiscal fourth quarter. The AirTouch UltraSoft memory foam cushion is a breakthrough in the treatment of sleep apnea.
According to the company, it is well-positioned for fiscal 2018 and will work on a pipeline of new products and connected care solutions for sleep apnea, COPD, neuromuscular disease and other clinical adjacencies.
Other Key Picks
Other top-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , athenahealth, Inc. and Varian Medical Systems, Inc. .
athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.
Varian Medical has a long-term expected earnings growth rate of 8%. The stock carries a Zacks Rank of 2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Here's Why You Must Add ResMed (RMD) to Your Portfolio Now
ResMed Inc. (RMD - Free Report) has been gaining investor confidence on consistently positive results. The stock has gained 11.3% over a year, versus the S&P 500’s 3.8% decline and its broader industry’s 0.9% fall.
Moreover, the company has a market cap of $11.91 billion. Its five-year historical growth rate is also favorable at 9.3% compared with the industry’s 5.7%.
Considering the solid prospects, this Zacks Rank #2 (Buy) stock is an attractive bet for investors at the moment.
Factors Acting in Favor
Let’s take a look at the possible growth propellers:
Solid Q2 Performance
ResMed exited the second quarter on a promising note with better-than-expected earnings and revenues. We encouragingly note that the company achieved solid double-digit revenue growth in the quarter, led by sales from Software-as-a-Service businesses as well as its new mask products and devices.
Growing International Business
In the second quarter of fiscal 2018, revenues at the United States, Canada and Latin American countries grew low double-digits year over year. Europe, Asia and other markets grew mid double-digits. Growth was particularly strong in France, the U.K., Japan as well as Australia and New Zealand. Mask sales internationally were impressive, reflecting strong adoption of F20 and N20 mask products.
Notably, ResMed continues to invest and expand its presence in high growth markets like China, South Korea, India, Brazil and many countries in Eastern Europe.
Solid Three-Horizon Growth Strategy
ResMed has identified three horizons for growth. In terms of progress in the first horizon, which focuses on ResMed’s core sleep apnea franchise, the company has been making advanced technology combined with digital health and connected care solutions.
The second horizon is growth in adjacent product and geographic markets, including homecare ventilation for Chronic Obstructive Pulmonary Disease, Amyotrophic Lateral Sclerosis and other respiratory disorders. In this regard,the company also recently informed about its first self-branded portable oxygen concentrator — Mobi — subject to a fiscal third-quarter launch. In the fiscal first quarter, the company re-launched the portable oxygen concentrator called Activox. The company is also focusing on growing in emerging markets like China, India and Brazil.
The third growth horizon incorporates a portfolio of opportunities in new markets, including clinical adjacencies such as atrial fibrillation, heart failure with preserved ejection fraction, asthma, chronic disease management as well as sleep health and wellness.
Focus on Product Development
In order to maintain its leadership position in the SDB market and drive sales, ResMed is focusing on product development and innovation. In this regard, the company launched AirTouch full face mask in the United States in the fiscal fourth quarter. The AirTouch UltraSoft memory foam cushion is a breakthrough in the treatment of sleep apnea.
According to the company, it is well-positioned for fiscal 2018 and will work on a pipeline of new products and connected care solutions for sleep apnea, COPD, neuromuscular disease and other clinical adjacencies.
Other Key Picks
Other top-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , athenahealth, Inc. and Varian Medical Systems, Inc. .
Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.
athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.
Varian Medical has a long-term expected earnings growth rate of 8%. The stock carries a Zacks Rank of 2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>