ResMed Target of Unusually High Options Trading (NYSE:RMD)

Key Points

• Unusually heavy bearish options activity hit ResMed, with traders buying 2,608 put options on Friday — about 410% above the normal daily volume.
• ResMed shares fell 1.9% to $204.44, while the company’s latest earnings beat expectations with EPS of $2.86 on revenue of $1.43 billion, both slightly ahead of analysts’ forecasts.
• Wall Street remains mostly constructive on the stock, with a Moderate Buy consensus and an average price target of $266.55, even as CEO Michael J. Farrell recently sold shares under a pre-arranged trading plan.

ResMed Inc. (NYSE:RMD - Get Free Report) was the target of unusually large options trading on Friday. Stock traders bought 2,608 put options on the stock. This represents an increase of approximately 410% compared to the typical daily volume of 511 put options.

ResMed Trading Down 1.9%

Shares of RMD stock traded down $4.01 on Friday, hitting $204.44. 316,597 shares of the stock traded hands, compared to its average volume of 1,279,212. The company has a debt-to-equity ratio of 0.06, a quick ratio of 2.33 and a current ratio of 3.01. ResMed has a twelve month low of $180.26 and a twelve month high of $293.81. The firm's 50-day moving average price is $200.62 and its two-hundred day moving average price is $228.44. The stock has a market capitalization of $29.66 billion, a PE ratio of 19.69, a PEG ratio of 1.21 and a beta of 0.78.

ResMed (NYSE:RMD - Get Free Report) last released its quarterly earnings data on Thursday, April 30th. The medical equipment provider reported $2.86 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.79 by $0.07. The firm had revenue of $1.43 billion during the quarter, compared to analysts' expectations of $1.42 billion. ResMed had a net margin of 27.44% and a return on equity of 25.35%. ResMed's revenue was up 10.8% compared to the same quarter last year. During the same period last year, the business earned $2.37 earnings per share. As a group, analysts anticipate that ResMed will post 11.13 EPS for the current year.

ResMed Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Thursday, June 18th. Stockholders of record on Thursday, May 14th were issued a dividend of $0.60 per share. The ex-dividend date was Thursday, May 14th. This represents a $2.40 dividend on an annualized basis and a dividend yield of 1.2%. ResMed's dividend payout ratio (DPR) is currently 23.14%.

Insider Buying and Selling

In other ResMed news, CEO Michael J. Farrell sold 4,991 shares of ResMed stock in a transaction on Tuesday, July 7th. The shares were sold at an average price of $218.55, for a total value of $1,090,783.05. Following the completion of the transaction, the chief executive officer owned 466,223 shares of the company's stock, valued at approximately $101,893,036.65. The trade was a 1.06% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 14,973 shares of company stock worth $3,096,067 in the last quarter. 0.65% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds have recently added to or reduced their stakes in the business. Handelsbanken Fonder AB increased its stake in ResMed by 36.6% during the second quarter. Handelsbanken Fonder AB now owns 94,895 shares of the medical equipment provider's stock worth $18,493,000 after acquiring an additional 25,419 shares during the last quarter. Czech National Bank grew its holdings in shares of ResMed by 4.1% during the 2nd quarter. Czech National Bank now owns 41,288 shares of the medical equipment provider's stock worth $8,046,000 after purchasing an additional 1,613 shares during the period. PensionDanmark Pensionsforsikringsaktieselskab increased its position in shares of ResMed by 1.6% during the 2nd quarter. PensionDanmark Pensionsforsikringsaktieselskab now owns 28,330 shares of the medical equipment provider's stock worth $5,521,000 after purchasing an additional 450 shares during the last quarter. Assenagon Asset Management S.A. lifted its position in ResMed by 48.2% in the second quarter. Assenagon Asset Management S.A. now owns 83,852 shares of the medical equipment provider's stock valued at $16,341,000 after buying an additional 27,282 shares during the last quarter. Finally, JGP Wealth Management LLC lifted its position in ResMed by 9.5% in the second quarter. JGP Wealth Management LLC now owns 4,767 shares of the medical equipment provider's stock valued at $929,000 after buying an additional 415 shares during the last quarter. 54.98% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

RMD has been the subject of several recent analyst reports. Morgan Stanley reissued an "equal weight" rating and issued a $230.00 price target (down from $286.00) on shares of ResMed in a report on Wednesday, June 17th. The Goldman Sachs Group reiterated a "buy" rating on shares of ResMed in a research note on Wednesday, July 1st. Wall Street Zen cut ResMed from a "buy" rating to a "hold" rating in a report on Saturday, March 14th. KeyCorp lowered their price target on ResMed from $290.00 to $266.00 and set an "overweight" rating on the stock in a research note on Monday, June 22nd. Finally, JPMorgan Chase & Co. started coverage on ResMed in a research report on Wednesday, April 15th. They set an "overweight" rating for the company. One analyst has rated the stock with a Strong Buy rating, nine have issued a Buy rating and six have assigned a Hold rating to the company. Based on data from MarketBeat, ResMed currently has a consensus rating of "Moderate Buy" and an average price target of $266.55.

ResMed Company 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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