Shares in ResMed Inc [ASX:RMD] are now sitting steady at $16.55, rising 1.16% today. This week saw the medical specialist group hit a record high in its share price ahead of the release of their Q2 results for 2019 — due Friday, 25 January.
ResMed is a Californian health and sleep device company specialising in the treatment of various sleep disorders. They currently produce a range of products designed to treat sleeping problems including sleep apnoea and chronic obstructive pulmonary disease.
Why this is a big deal for companies like ResMed?
Despite being in such a niche market, ResMed have made every effort to define themselves as the leaders in their industry. Shares in ResMed have outperformed others in the med-tech industry, with a 48% rise against an overall 2% decline on the ASX.
ResMed’s share position in the US and in Australia more than likely comes down to the growing market for new medical devices, which companies like Sigma Healthcare Limited [ASX:SIG] and Healius Limited [ASX:HLS] have also taken advantage of:
‘Rising healthcare expenditures, increasing obesity and unhealthy lifestyle practices along with expanded treatment options are anticipated to continue driving demand for sleep apnea devices.’
Over the past year, ResMed have contributed to their growing revenue base by expanding their products portfolio and shifting their focus toward the digital software space.
What’s the prognosis for Q2 2019?
Given this long-term outlook (and the fact ResMed have already benefited from strong earnings growth in 2018), earnings from Friday’s trade update are forecast to be around US$0.92 a share.
The market seems to see the potential in ResMed following a stream of product upgrades and market acquisitions. Given the extent of sleep-related disorders globally, it may be that investors expect this potential to continue into 2019.
For Money Morning
PS: Excited about the growth in healthcare stocks? Find out how you can get in on these high-risk tech plays with massive potential. Read Harje Ronngard’s free report ‘The key to Spotting Breakout Biostocks’ here for free.