Fisher & Paykel Healthcare Ltd: Should I Buy Now?

Fisher & Paykel Healthcare Ltd [FPH.NZX].

After a great half year profit result back in May this little puppy just kept on climbing moving approx 15% from the result date until today.

Last week there was a small currency inspired blip although no material impact was felt. This has happened many times before so there's nothing unexpected about it.

The impact of the Resmed factor looks to have waned with rumours that the once on again is off again in terms of the financial impact - 20 + million thus far off the bottom line.

Well have to wait and see about that, except the market seems to have left that behind.

The thing is when do you buy?

Wait and see if the stock goes down or buy now and look back in 2-3 years and prove that your initial ideas were on the money.

It a tough decision.

If you are like me put this on your watchlist and wait. For the right time and circumstances that would make this a buy. You may have to wait for many years, not weeks or days.

You will know from your research that this company is going to do much better in the future.

Read this again in 5 years then tell me what you think.

Be ya FPH share price at least doubles.




Fisher & Paykel Healthcare @ Share Investor


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c Share Investor 2017

Resmed takes market share from Fisher & Paykel Healthcare

I referred to a whisper about Fisher & Paykel Healthcare's [FPH.NZX] lagging share price in a late July post and the cause of it possibly coming from intense competition from Resmed Inc [RMD.ASX] and that investors in FPH would have to wait for some concrete evidence that this was happening when RMD's profit result for the 2011 full year was out.

I hate to say this as a FPH investor but I think the whisper may have some merit to it, at least over the last year.

Resmed's full year profit to 30 June 2011 reveals that it has increased revenue by around 18% and profit up by just under 20%. FPH has increased revenue by around 10% with profit up by around 2%.* in the 2011 full year result. All may not be all dire though because in the fourth quarter its respiratory and acute care (RAC )revenue grew 24% and its obstructive sleep apnea (OSA) products operating revenue grew 17%. The market for these products is clearly growing rapidly but RMD appears to have the slight edge in terms of competition between the two companies which it has added to by aggressively buying companies that it sees has products with a good fit to theirs to gain even more market share. FPH has thus far gained their market share by increasing R & D spending and growing organically.

Resmed has recently concluded a 5 year agreement with Carefusion Inc [CFN.NYSE], a company that has good breathing and sleep technology bought Biancamed, a leading OSA technology leader and on August 1 purchased Grundler GmbH, a developer of innovative medical humidification products. These medical sectors, especially the sleep technology area, are something that FPH has placed alot of faith and research and development on for its future.

Fisher & Paykel is doing well in the sectors that they operate in but their main competitor in the fast growing OSA & RAC sector appears to be going Resmed's way currently and should be a minor niggle to FPH investors. They do have a technological edge though in several newly launched products this year.

With the impact of the Global Financial Crisis 2 (GFC 2) looming and an impact on share prices it might be wise for investors to keep a watching eye on the FPH share price for opportunities.

* Figures in US dollars


Disc I own FPH in the Share Investor Portfolio



Fisher & Paykel Healthcare @ Share Investor

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c Share Investor 2011

Resmed kicking Fisher & Paykel Heathcares butt?

An interesting take on Fisher & Paykel Healthcare's [FPH.NZX] flagging share price of late from the Melbourne Age' "Insider".

Ian McIlwraith has heard "whispers" that Australian company Resmed Inc [RMD.ASX] may have taken market share in the sleep apnea sector that FPH excels in and is the technological leader:

"A little like a Tour de France rider who falls off the back of the pack, though, the shares are showing little sign of being able to bridge the gap in the near term without a significant shift in fortunes.

They have jagged their way down to yesterday, threatening to break under the $NZ2.50 level, and there is a whisper around that one reason for the decline is that Resmed, which competes in a similar space on sleep relief products, has been nicking market share from FPH.

Certainly Resmed's stock has risen from about $2.85 to just short of $3.10 a share in recent weeks - although that raises a ''chicken and egg'' question. Is the rise in Resmed because it is beating FPH in a commercial sense, or because investors are switching from one to the other?

Resmed is due to report its results on August 5, which might clarify the situation". Melbourne Age , July 21 2011

I have not heard these "whispers" and as McIlwraith pointed out himself FPH's May profit announcement that ends the FY period to March 31 2011 was ahead of expectations and the company was very positive about the coming 12 months in terms of sales increases.

Resmed would have had to have taken market share off FPH since the end of balance date for full year 2011 for the "whisper' to have any validity and I am still inclined to think that the flagging share price can be put solely down to the low US dollar that the bulk of company revenue is denominated in and the relatively higher kiwi dollar against other currencies rather than a hit from their main competitor.

I am looking to buy this stock at around current prices and did the last time this stock was around these levels 3 years ago.

The reason why I am a little skeptical about the claim this author makes is that FPH stock was trading below current levels 3 years ago in a market pre the 2008 market crash with the currency at similar high levels - close to 80c from memory - and no question of poor sales or impacts from Resmed or any other competitor.

As the author has indicated though, prospective investors in FPH might want to wait until Resmed's profit result early out early August and even then there will only be a 3 month indication of any impact by them on FPH sales so if there have been any sales taken from FPH one quarter isn't a concrete result for Resmed or a material impact for Fisher and Paykel Healthcare.

Disc I own FPH in the Share Investor Portfolio


Fisher & Paykel Healthcare @ Share Investor

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I'm Buying: Fisher & Paykel Healthcare Ltd
Share Investor's Total Returns: Fisher & Paykel Healthcare Ltd
Share Investor's 2011 Stock Picks
Stock of the Week: Fisher & Paykel Healthcare Ltd
Fisher & Paykel Healthcare & the US Dollar
Mondrian Investment Partners take stake in Fisher & Paykel Healthcare
Fisher & Paykel Healthcare: 2010 Full Year Profit rests on Foreign exchange movement
Long Term View: Fisher & Paykel Healthcare
Stock of the Week: Fisher & Paykel Healthcare
Analysis - Fisher & Paykel Healthcare: FY Profit to 31/03/09
Schroder Investment Management takes big Fisher & Paykel Healthcare stake
Long VS Short: Fisher & Paykel Healthcare
Big Fisher & Paykel Healthcare trades a curious taleWhy did you buy that stock? [Fisher & Paykel Healthcare]
Drinking and Trading
Share Investor's 2008 stock picks
Fisher & Paykel: A tale of two companies
FPH downgrade masks good performance

Discuss FPH @ Share Investor Forum



c Share Investor 2011