BlackRock Inc. Makes New $2.40 Billion Investment in ResMed Inc. $RMD

Key Points

• BlackRock disclosed a new $2.40 billion stake in ResMed, acquiring 12.3 million shares and becoming the owner of approximately 8.49% of the company. Other institutions also initiated positions, bringing institutional ownership to 54.98%.
• ResMed reported quarterly earnings of $2.95 per share, exceeding estimates of $2.89, while revenue rose 8.6% year over year to $1.46 billion. The company also increased its quarterly dividend from $0.60 to $0.66 per share.
• Insiders sold 22,973 shares worth approximately $4.89 million over the past 90 days. Analyst sentiment remains mixed, with an overall “Hold” rating and a consensus price target of $239.38.

BlackRock Inc. bought a new stake in ResMed Inc. (NYSE:RMD - Free Report) during the 2nd quarter, according to its most recent Form 13F filing with the SEC. The firm bought 12,317,194 shares of the medical equipment provider's stock, valued at approximately $2,400,375,000. BlackRock Inc. owned 8.49% of ResMed as of its most recent SEC filing.

Several other hedge funds and other institutional investors also recently made changes to their positions in the company. Deutsche Bank AG bought a new stake in shares of ResMed during the 2nd quarter worth approximately $257,692,000. Perigon Wealth Management LLC bought a new position in ResMed in the second quarter valued at approximately $4,597,000. Phillips Wealth Planners LLC acquired a new position in ResMed during the second quarter valued at approximately $247,000. Trust Co. of Vermont acquired a new position in ResMed during the second quarter valued at approximately $39,000. Finally, Mitsubishi UFJ Asset Management Co. Ltd. bought a new stake in ResMed during the second quarter worth $68,376,000. 54.98% of the stock is currently owned by institutional investors and hedge funds.

Insider Transactions at ResMed

In other news, CEO Michael J. Farrell sold 4,991 shares of ResMed stock in a transaction dated Friday, August 7th. The stock was sold at an average price of $205.69, for a total transaction of $1,026,598.79. Following the sale, the chief executive officer directly owned 466,256 shares of the company's stock, valued at approximately $95,904,196.64. This trade represents a 1.06% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Peter C. Farrell sold 8,000 shares of the business's stock in a transaction dated Wednesday, August 5th. The stock was sold at an average price of $225.00, for a total value of $1,800,000.00. Following the sale, the director owned 52,773 shares in the company, valued at approximately $11,873,925. This trade represents a 13.16% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 22,973 shares of company stock valued at $4,885,436. Insiders own 0.65% of the company's stock.

ResMed Price Performance

Shares of NYSE:RMD opened at $230.84 on Thursday. The company has a market cap of $33.30 billion, a price-to-earnings ratio of 22.13, a PEG ratio of 1.38 and a beta of 0.76. The company has a debt-to-equity ratio of 0.06, a current ratio of 3.10 and a quick ratio of 2.42. The firm has a 50 day simple moving average of $205.75 and a 200 day simple moving average of $220.19. ResMed Inc. has a one year low of $180.26 and a one year high of $293.81.

ResMed (NYSE:RMD - Get Free Report) last issued its earnings results on Thursday, August 6th. The medical equipment provider reported $2.95 earnings per share for the quarter, beating analysts' consensus estimates of $2.89 by $0.06. The firm had revenue of $1.46 billion for the quarter, compared to analyst estimates of $1.46 billion. ResMed had a net margin of 26.94% and a return on equity of 25.58%. The company's quarterly revenue was up 8.6% on a year-over-year basis. During the same quarter last year, the business posted $2.55 earnings per share. Research analysts predict that ResMed Inc. will post 12.03 earnings per share for the current fiscal year.

ResMed Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, September 24th. Investors of record on Thursday, August 20th will be given a dividend of $0.66 per share. The ex-dividend date is Thursday, August 20th. This represents a $2.64 dividend on an annualized basis and a yield of 1.1%. This is an increase from ResMed's previous quarterly dividend of $0.60. ResMed's dividend payout ratio is presently 23.01%.

Analyst Ratings Changes

RMD has been the topic of a number of research analyst reports. Mizuho reduced their target price on ResMed from $235.00 to $220.00 and set an "outperform" rating on the stock in a report on Wednesday, July 15th. Rothschild & Co Redburn initiated coverage on ResMed in a report on Wednesday. They set a "neutral" rating and a $230.00 price target for the company. The Goldman Sachs Group restated a "buy" rating on shares of ResMed in a research report on Wednesday, July 1st. Weiss Ratings raised ResMed from a "hold (c-)" rating to a "hold (c)" rating in a research note on Tuesday, August 11th. Finally, UBS Group reiterated a "buy" rating and issued a $300.00 target price on shares of ResMed in a research report on Tuesday, July 21st. Seven analysts have rated the stock with a Buy rating and ten have issued a Hold rating to the stock. According to MarketBeat.com, ResMed currently has an average rating of "Hold" and a consensus price target of $239.38.

ResMed Profile

ResMed NYSE: RMD is a global medical device and cloud-connectivity company focused on improving outcomes for people with sleep-disordered breathing and chronic respiratory conditions. Founded in 1989, the company is headquartered in San Diego, California, and develops, manufactures and distributes a range of devices and software used by patients, clinicians and providers worldwide.

ResMed's product portfolio centers on noninvasive ventilation and sleep therapy equipment, including continuous positive airway pressure (CPAP) and bilevel devices, masks and related accessories for the treatment of obstructive sleep apnea and other respiratory disorders.

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