1 ASX stock to consider buying that could be the next ResMed

There are obviously no guarantees in the share market. But if you're willing to take on some risk, the rewards could be great in 10 years' time.

| More on:
Shot of a young scientist using a digital tablet while working in a lab.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

Resmed CDI (ASX: RMD) has been a staple in many ASX stock portfolios for decades now.

And it has rewarded the faith handsomely, becoming a 6-bagger over the past ten years. 

It's a stunning 19-bagger if you go back 20 years.

Of course, the catch is that those investors who bought in March 2004 or 2014 would not have known with 100% certainty that their investment would become so successful.

That's the nature of investing in shares. You buy them when they're cheaper to take on the risk that the story could turn sour — or become a wild triumph.

There is one ASX stock at the moment that I think has the potential to become the next ResMed.

While I can't tell you whether it will have become a 6-bagger in 2034, it currently has a fighting chance to be much higher compared to now.

This ASX stock has tripled in a year

Like ResMed, Clarity Pharmaceuticals Ltd (ASX: CU6) also plays in the healthcare field but is involved in developing products for prostate cancer.

Already this year the stock price has rocketed just shy of 30%. The shares have more than tripled in the past year.

That's all due to favourable results coming from testing of its copper therapies on prostate cancer patients.

Back in January, Frazis Capital portfolio manager Michael Frazis was full of praise for the Sydney biotech.

"This is the most exciting company I've come across in Australia lately."

Providing hope for a bleak situation

Even though prostate cancer is common, the fact remains treatments can be soul-destroying for patients.

"Treatment involves radical prostatectomy to remove 'the true heart of the male', hormone therapy, and traditional radiotherapy and chemotherapy," said Frazis in a memo to clients.

"These come with a bleak list of side effects: incontinence, impotence, loss of interest in sex, and depression."

Clarity is one of a bunch of companies seeking to improve this situation.

"The hope is that the next generation of radiopharmaceuticals will be able to differentiate between harmless and metastatic disease, limit unnecessary treatments, catch any recurrence, and ultimately cure prostate cancer without such bleak side effects."

Admittedly the $717 million company is sparsely covered by professional investors at the moment.

But broking platform CMC Invest shows at least Jefferies and Wilsons rating Clarity Pharmaceuticals as a buy currently.

Motley Fool contributor Tony Yoo has positions in ResMed. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

Happy healthcare workers in a labs
Healthcare Shares

Macquarie initiates coverage of Neuren Pharmaceuticals shares; forecasts 45% upside

The broker described Neuren as a standout in the ASX biotech sector.

Read more »

A woman leans forward with her hand behind her ear, as if trying to hear information.
Healthcare Shares

Does Macquarie think Cochlear shares are a buy, hold, or sell?

Macquarie has released a new note on Cochlear following the company's FY25 profit guidance change.

Read more »

Stethoscope with a piggy bank in the middle.
Healthcare Shares

Up 18% this year, does Macquarie expect NIB shares to go higher?

This expert has a bold prediction for NIB.

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

Why is the Mesoblast share price up 11% in June?

The ASX biotech share reached a 10-week high of $1.94 today.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Healthcare Shares

Up 51% since the tariff pain, is it too late to buy Pro Medicus shares?

After rocketing higher, is the ASX healthcare share still an opportunity?

Read more »

A woman wearing a yellow shirt smiles as she checks her phone.
Healthcare Shares

CSL shares push higher on US FDA approval

This biotech giant has been given a boost in the United States.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Healthcare Shares

Up 29% this year, does Macquarie expect Medibank Private shares to continue rising?

Medibank's explosive share price growth has caught the eye of this broker.

Read more »

Man in business suit carries box of personal effects
Healthcare Shares

Monash IVF shares jump 9% as CEO quits after second embryo incident

Two incidents at its clinics have cost this CEO his job.

Read more »