ResMed Inc. (RMD): Today's Featured Health Services Winner

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

ResMed ( RMD) pushed the Health Services industry higher today making it today's featured health services winner. The industry as a whole closed the day down 0.3%. By the end of trading, ResMed rose 63 cents (1.6%) to $41.14 on heavy volume. Throughout the day, 1.9 million shares of ResMed exchanged hands as compared to its average daily volume of 1.1 million shares. The stock ranged in a price between $40.55-$41.48 after having opened the day at $40.65 as compared to the previous trading day's close of $40.51. Other companies within the Health Services industry that increased today were: Arrhythmia Research Technology ( HRT), up 23.1%, Response Genetics ( RGDX), up 14.9%, IsoRay ( ISR), up 8.7%, and Fonar Corporation ( FONR), up 8.1%.
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ResMed Inc., through its subsidiaries, engages in the development, manufacture, and distribution of medical equipment for treating, diagnosing, and managing sleep-disordered breathing and other respiratory disorders. ResMed has a market cap of $5.79 billion and is part of the health care sector. The company has a P/E ratio of 21.7, above the S&P 500 P/E ratio of 17.7. Shares are up 59.5% year to date as of the close of trading on Monday. Currently there are six analysts that rate ResMed a buy, no analysts rate it a sell, and five rate it a hold.

TheStreet Ratings rates ResMed as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the negative front, BG Medicine ( BGMD), down 8.4%, Heartware International ( HTWR), down 6.5%, Retractable Technologies ( RVP), down 6.3%, and Unilife Corporation ( UNIS), down 5.4%, were all laggards within the health services industry with UnitedHealth Group ( UNH) being today's health services industry laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the health services industry could consider Health Care Select Sector SPDR ( XLV) while those bearish on the health services industry could consider ProShares Ultra Short Health Care ( RXD).

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