INSIDE SPECIAL – ANALYST NOTES
In a recent blog post we outlined our investment thesis for Resmed (ASX: RMD), the medical device manufacturer. In a follow up to this piece we are pleased to share an internal review of Resmed’s first quarter results for 2016. We hope this provides an insight into our ongoing dialogue with investments.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
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nick
:
Thanks for a great article Ben. ResMed is described in the industry as the sleep apnoea version of Apple! They no doubt make market leading products and a great brand.
In regards to the below comment.
‘We’ve previously discussed how the seamless data integration of the Airsense is a major advantage for distributors’. This is probably not a major advantage.
Fisher and Paykel implemented cloud based data management system well before ResMed and it is very nice to use.
The New Philips dream station has Built-In Bluetooth Connectivity and DreamMapper: The Bluetooth is built-in with an SD Data Card for data storage. The Bluetooth connects to the DreamMapper app to track therapy. DreamMapper is a free mobile and web-based application with motivational alerts, troubleshooting advice, and educational content. The built in Bluetooth sends important information about your sleep to DreamMapper, allowing you to stay in touch with your therapy. Pretty cool!
Philips have also recently launched 2 new ‘game changing masks’ and the reviews and feedback has been pretty remarkable.
for those who are interested these are the dreamware mask and the amara view mask
Fisher and Paykel is also releasing some new products later in the year. Fisher paykel nailed it with their last mask range which is why their shares have been smashing it over the last few years. They took a lot of market share away from Resmed which is why they dropped their margins and increased the margins available for resellers.
The best thing about ResMed is they have such a strong brand (like apple) and customers are very loyal to them (like apple).
The beauty of the sleep apnea industry is that compliant patients generally use the therapy for life! This is a bonanza for manufactures as the pool of customers keeps growing and growing. The masks wear pretty quickly (hence only the 3 month warranty) and you constantly have to buy new parts.
Across the board, investments in the sleep apnoea space have generally been very fruitful for investors.
The big risk is that someone comes up with an alternative therapy that is just as effective without the hassle of wearing a mask etc. One interesting product which caught my attention was Airing Revolutionary Micro-CPAP. It’s innovation like this which adds a bit of risk.
Going forward, i believe that ResMed will remain a highly profitable company. They have a mountain of intellectual property and patents which safely guard which makes it very difficult for other companies to come up with better versions of their products. Competition in the space is intense and more and more players are trying very hard to take market share.
Thanks for the great read.
Nick
Michael
:
What changed your thinking after exiting your position in RMD back in May?