Should Investors Be Selling ResMed (NYSE:RMD) Stock Following Today’s Needham Downgrade?


ResMed (NYSE:RMD) Receives a Downgrade

Needham cut shares of ResMed (NYSE:RMD) stock from a “Buy” rating to a “Hold” rating in recent note finalized on 17 December.

From a total of 13 analysts covering ResMed Inc (NYSE:RMD) stock, 7 rate it a ”Buy”, 2 a “Sell”, and 8 a ”Hold”. This means that 41% of the ratings are positive. The highest target price is $70 while the lowest target price is $44. The mean of all analyst targets is $59.37 with a 9.57% above today’s ($56.13) stock price. ResMed Inc was the topic of 4 analyst reports since August 3, 2015 according to the firm StockzIntelligence Inc. Goldman Sachs upgraded shares on September 25 to “Buy” rating. Morgan Stanley upgraded RMD stock in a recent report from August 3 to “Overweight” rating.

The stock increased 0.75% or $0.42 during the last trading session, striking $56.13. Approximately shares of stock traded hands. ResMed Inc. (NYSE:RMD) has declined 0.58% since May 14, 2015 and is downtrending. It has outperformed by 1.68% the S&P500.

The overall sentiment of institutions has increased to 1.24 in Q2 2015. Its up 0.23, from 1.01 in 2015Q2. The ratio increased, as 35 institutions have sold all the shares of ResMed Inc. that they owned while 92 funds have taken shares off the table. 32 funds have purchased shares for the first time while 125 added to their positions. These institutions now hold 65.14 million shares or 42.81% less than the 113.90 million shares they owned in 2015Q2.

The Fund American Capital Management Inc currently is holding shares equating to 3.16% of its total portfolio in ResMed Inc. representing a total of 597,300 shares. Another fund,Halsey Associates Inc Ct, is holding a total of 263,905 shares equating to 3.16% of their holdings. Additionally, Capital Investment Services Of America Inc. has a 230,231 share stake in ResMed Inc. which represents 2.81% of their total portfolio. The Fund, Van Hulzen Asset Management Llc, based out of California, has also built up a stake in the stock, which represents a total of 2.67% of their total portfolio. Finally Hunter Associates Inc., a fund which is based in the state of Pennsylvania reported a total holdings of 85,895 shares.

Insider activity is a very important aspect to track on any stock. Going back to March 5, 2015, shareholders of ResMed Inc. have witnessed 0 buys, and a total of 16 selling transactions equating to a net activity of approximately $9.52 million . Farrell Michael J. sold 5,975 shares worth approximately $330,716. Douglas Robert Andrew sold 6,333 shares worth approximately $330,139. Pendarvis David sold 5,500 shares worth approximately $288,563. Farrell Peter C sold 27,169 shares worth approximately $1.38 million. The company insider Hollingshead James sold 4,455 shares worth $225,717.

ResMed Inc. is engaged in the development, manufacturing, distribution and marketing of medical products for the diagnosis, treatment and management of respiratory disorders, with a focus on sleep-disordered breathing . The company has a market cap of $7.78 billion. The Firm develops various products for SDB and other respiratory disorders, including airflow generators, diagnostic products, mask systems, headgear and other accessories. It has 22.87 P/E ratio. It produces continuous positive airway pressure, variable positive airway pressure and AutoSet systems for the titration and treatment of SDB.

According to Zacks Investment Research, “ResMed Inc. is a leading designer, manufacturer and distributor of medical equipment for treating and diagnosing sleep disordered breathing. Sleep disordered breathing includes sleep apnea and related respiratory conditions. The company sells a comprehensive range of diagnostic and treatment devices in countries through a combination of wholly owned subsidiaries and independent distributors.”