Resmed: Losing heart

Resmed (ASX: RMD) has released the preliminary results of the Serve-HF trail for patients with Chronic Heart Failures. The trial identified an increased risk of cardiovascular mortality for patients that received ventilation therapy. The recent launch of Resmed’s new flow generator platform has been strongly received by the market. But in accordance with our somewhat uncompromising investment process, we have gradually reduced the position as the share price appreciated strongly. While the fundamentals of Resmed’s core business might remain sound, the company’s prospects have dimmed on this result. While sales in the space represented a smaller part of revenue, the margins were high. The possible shuttering of this business could have a material impact on the company’s profitability in the more immediate term. (VIEW LINK)