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URL:  https://boards.fool.com/resmed-16792779.aspx

Subject:  Resmed Date:  2/25/2002  1:53 AM
Author:  chrischalkley Number:  3635 of 6186

jehudith (and any others who may have a view),

I take it from your post last year, you're a fan of Resmed (ASX: RMD, also NASDAQ: RMD).

What's happened? When its price was over the $10 mark, I thought it looked too pricey. Now it's well down into my target (buy) price range. I can't find anything dramatic that would cause this drop. Latest half year statements look all right. The only blip on the horizon is a story about Innomedics's and its new product, 'Nasal Aire':
http://www.thewest.com.au/20020125/business/tw-business-home-sto41629.html

This doesn't seem like much of a threat. Innomedics have only just received FDA approval. They had no actual sales when this story appeared. If they've been getting FDA approval, it's not hard to accept that Innomedics would have back-orders and pent-up demand. $40mill doesn't seem to be a dramatic threat to Resmed's recent $187mill half year sales, or to the $500million market. Resmed claim that the Nasal Aire device is a subtly different market, and not a direct threat. Innovision claim that 98% prefer their device. That may be so. Probably 98% percent of those who wear glasses would prefer not to, but they still do. Hardly seems to justify the recent falls.

I searched the internet, but didn't find anything about Innomedics, except for the article above. The only references to Nasal Aire were in health journals, where it is lumped with similar products. Hardly seems to be earth-shattering.

What am I missing? Has the market just suddenly got tired of companies with 3-digit P/Es, or is there something more sinister? Nervousness about accounting for last year's acquisition of Medizin-Technology GmbH?

Any ideas?

Chris


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