It's been a remarkable 12 months for Australia's healthcare sector which has handily outperformed the broader sharemarket. In fact, over that time, the S&P/ASX 200 Health Care Index (Index: ^AXHJ) (ASX: XHJ) has risen 39%, compared to the S&P/ASX 200's (Index: ^AXJO) (ASX: XJO) 9.8% rise, as can be seen in the chart below.
Source: Google Finance
While companies such as CSL Limited (ASX: CSL), Cochlear Limited (ASX: COH) and Ramsay Health Care Limited (ASX: RHC) have all put in stunning performances, climbing 39.5%, 58.4% and 43.8% respectively, ResMed Inc. (CHESS) (ASX: RMD) has been, by far, the strongest. The stock has risen a remarkable 104.4% over that time, making it one of the best performing stocks from the ASX 200.
Source: Google Finance
Is it too late to buy ResMed Inc.?
While it is easy to be deterred from investing in a company when its stock has rallied as hard as ResMed has over the last 12 months, there are plenty of reasons as to why ResMed is still a great buy.
ResMed is a US-based company which develops and manufactures products for the treatment of various respiratory disorders, with a particular focus on sleep apnea. Sleep apnea is becoming increasingly common in the Western world – partially as a result of growing obesity rates – whereby the sufferer experiences snoring and interrupted sleep.
While ResMed has been growing its sales strongly, largely thanks to the release of a number of new products, investors are clearly expecting that trend to continue well into the future. Meanwhile, it has been focused on reducing overhead and raw material costs which should provide yet another boost for profits when it reports its third quarter results later in the month.
Although it is difficult to see the stock doubling again over the next 12 months, it is clear that this high-quality company still has plenty of value to offer investors. As a bonus, ResMed generates most of its earnings overseas – particularly across Europe and the Americas – meaning that Australian investors will benefit handsomely from the plummeting Australian dollar.
