We wrote about ResMed (RMD) a few months ago in Livewire, warning of the downside. Patience has paid off for our readers and it has now become a buying opportunity. A quick summary of the fundamentals: 1. Leveraged to sleeping disorder volumes due to higher obesity rates in developed nations. 2. High product gross margins (> 60%). 3. Returns above the cost of capital (ROA > 15%). 4. Trading on a comparatively cheap multiple of 16.8x forward earnings. In terms of the charts, we have finally seen RMD break the shorter term downtrend last week. Now that it has been broken, it should resume the longer term uptrend, which implies levels up towards $6. Before then, we expect some strong resistance between $5.60 - $5.80.
Good result overnight as well, looks like it may have turned the corner