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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Discuss FPH @ Share Investor Forum
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c Share Investor 2011

Share Investor Portfolio 2: Value @ 5 August 2011

The Share Investor 2 Portfolio is a separate portfolio apart from the original Share Investor Portfolio and contains just one share, Contact Energy Ltd [CEN.NZX]. It will only have this one share in it and has a far shorter time frame than the original long-term portfolio that I started 8 years ago.

The portfolio was started July 7 with 9000 shares purchased at $5.34 at a total cost of $48,060.00 and $144.18 in brokerage.

After the 21st day of trading the portfolio was down by $1350.00 or 2.82% on the July 29 update to be worth a total of $46,530.00.

The portfolio is down 5.81% or $2790.00 since tracking began on July 7 2011.

Share Investor Portfolio 2 as at 17:30:00, Friday 05 August, 2011 (NZT)

Stock	Quantity	Cost price	Total cost	Market price	Market value	Change	%
CEN	9,000	$5.340	$48,060.00	$5.030	$45,270.00	$2,790.00	5.81%

5.81%

	Total cost	Market value	Change
	$48,060.00	$45,270.00	$-2,790.00

Share Investor Portfolio 2

Share Investor Portfolio 2: Value @ 22 July 2011
Share Investor Portfolio 2: Value @ 15 July 2011
Share Investor Portfolio 2: Value @ 14 July 2011
Share Investor Portfolio 2: Value @ 13 July 2011
Share Investor Portfolio 2: Value @ 12 July 2011
Share Investor Portfolio 2: Value @ 11 July 2011
Share Investor Portfolio 2: Value @ 8 July 2011
Share Investor Portfolio 2: Value @ 7 July 2011

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c Share Investor 2011

Share Price Alert: The Entire NZX

At time of writing the NZX 50 stockmarket index is down 95 points or 2.80% after a toweling on the DOW last night and a rogering in Europe.

Most non market watchers find days like these terrifying but I like market jitters like this because I love getting bargains. It is the equivalent of boxing day sales before Christmas.

I am by nature a contrarian and like to buy as others are selling.

Everything on the NZX today is down with the 5 biggest drops from the Share Investor Portfolio in this order.

Goodman Fielder Ltd [GFF.NZX] 6.1%
ASB Preference Shares [ASBPB.NZX] 3.9%
Steel & Tube Ltd [STU.NZX] 3.7%
Ryman Healthcare Ltd [RYM.NZX] 3.7%
Fletcher Building Ltd [FBU.NZX] 3.2%

I would suggest that Monday might be an even better opportunity to have another look as sentiment on Wall Street doesn't look good as well as some important economic data out overnight on jobs looks likely to be negative.

I will be looking to make a move on Fisher & Paykel Healthcare Ltd [FPH.NZX] after a good canning on the DOW, tomorrow NZ time. It is currently trading at $2.47, close to my target of $2.35.

Like we didn't see this all coming.

Share Price Alert Series

Contact Energy Ltd 4
The Warehouse Group Ltd 2
Contact Energy Ltd 3
Contact Energy Ltd 2
Xero Ltd 2
Pumpkin Patch Ltd 4
Pumpkin Patch Ltd 3
Hallenstein Glasson Holdings Ltd
Telecom New Zealand Ltd 4
Telecom New Zealand Ltd 3
Port of Tauranga Ltd
Freightways Ltd 3
Goodman Fielder Ltd 2
Freightways Ltd 2
Telecom New Zealand Ltd 2
Ryman Healthcare Ltd
Charlies Group Ltd
Fletcher Building Ltd 2
Contact Energy Ltd
Steel & Tube Ltd
Telecom New Zealand Ltd
New Zealand Stock Exchange Ltd
Mainfreight Ltd 2
The Warehouse Group Ltd
Pumpkin Patch Ltd 2
Hallenstein Glasson Holdings Ltd 2
Fletcher Building Ltd
Restaurant Brands Ltd
Mainfreight Ltd
Tourism Holdings
Goodman Fielder Ltd
Pumpkin Patch Ltd
Hallenstein Glasson Holdings Ltd
NZ Refining Ltd
Freightways Ltd
Xero Ltd


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c Share Investor 2011

Heartland Bank NZ Ltd: A Good time to Buy?

Investors are finding it hard to value the relatively new listing Heartland Bank NZ Ltd [HNZ.NZX]. It was listed on Jan 25 this year on the main board of NZX after a merger of CBS Canterbury, Southern Cross and the financial services business of PGC (MARAC), and has had some mergers and restructures since then when PPG Wrightson Finance was subsumed into HNZ and $55 million of capital was raised.

HNZ shares were trading at 88c on Feb 1 of this year and are currently trading at 61c as at close of business yesterday. Either the market has no faith in the value that management put on it or the company is undervalued.

The fact that the merged company has been trading in its present form since the beginning of the year means it doesn't have a long track record to prove its value to the market but with net tangible assets at 90c per share, there could be some money made here if those assets are quality ones and have been valued in terms of the current discount of assets in a global market with little appetite for risk.

The only downside that I see -and it is a big one - is its large debt burden of 1.9 billion and assets in the form of 1.75 billion in receivables and $285 million in cash or equivalents. (see Jan 2011 accounts) In the current climate where debt levels such as these have sunk other companies, this is probably the reason why investors have been a little cagey and the market has discounted the company and its shares.

HNZ's intention to become a fully fledged trading bank in due course means that investors that come in on the ground floor could be in for good long-term gains as the company grows and they are able to negotiate their way through a dire global financial situation and maintain their receivables accounts satisfactorily if things get worse and are able to tap future borrowing at good prices.

There is room for a private company such as this one. Its main competitors are TSB Bank and Kiwibank at this stage and the failure of Kiwibank to gain a strong foothold in business and its low value clients in personal banking leading to net losses over its 10 year lifespan will be incentive for Heartland to push on with capturing unsatisfied customers from that bank and the main ones as it grows.

Heartland has forecast an inaugural profit of between 6-8 million to be announced August 19 and investors will want to see that sustained and grown over the 2012 full year before Mum and Dad start climbing on board for a piece of the future action.

It might just be good value at 61c.


Heartland Bank @ Share Investor

Discuss HNZ @ Share Investor forum
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c Share Investor 2011