The ResMed Inc. (ASX: RMD) share price has bounced back from yesterday's heavy decline with a strong gain on Tuesday.
In morning trade the sleep treatment-focused medical device company's shares are up 4.5% to $15.74.
Why are ResMed's shares charging higher today?
With no news out of the company or broker notes that I'm aware of, today's gain appears to be bargain hunters swooping in to pick up shares after yesterday's selloff.
In addition to this, a further decline in the Australian dollar is likely to have given its share price a boost.
This is because ResMed's ASX-listed shares are valued at a tenth of its NYSE-listed shares. Overnight they traded over 2.5% higher to US$112.90 on the NYSE, which effectively values ResMed's shares at US$11.29 a piece.
Based on the current exchange rate between the AUD and USD, this equates to approximately $15.70 per share.
Is this a good price to pay for its shares?
I think it is if you're prepared to hold onto its shares for the long-term. I believe ResMed is one of the best growth shares on the Australian share market and that its long runway for growth makes it a great buy and hold option along with healthcare peers Cochlear Limited (ASX: COH) and CSL Limited (ASX: CSL).
Incidentally, a recent note out of Morgan Stanley declared ResMed as a buy (overweight rating) with a $16.80 price target. This price target implies further upside of approximately 7% for its shares over the next 12 months.
The broker reiterated its positive view on the company after it announced the US$225 million acquisition of Propeller Health.
It believes the provider of digital connected care for patients with chronic obstructive pulmonary disease (COPD) will allow ResMed to further develop its suite of COPD products and underpin its future growth. I think the broker makes a great point and would suggest investors consider heeding its advice by picking up shares.
