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

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 lower today making it today's featured Health Services laggard. The industry as a whole closed the day up 0.5%. By the end of trading, ResMed fell 86 cents (-1.9%) to $43.63 on average volume. Throughout the day, one million shares of ResMed exchanged hands as compared to its average daily volume of 934,900 shares. The stock ranged in price between $43.43-$44.29 after having opened the day at $44.11 as compared to the previous trading day's close of $44.49. Other companies within the Health Services industry that declined today were: USMD Holdings ( USMD), down 11.2%, Spherix ( SPEX), down 9.4%, CombiMatrix Corporation ( CBMX), down 9.1%, and Misonix ( MSON), down 6.8%.
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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 $6.27 billion and is part of the health care sector. The company has a P/E ratio of 22.1, above the S&P 500 P/E ratio of 17.7. Shares are up 5.1% year to date as of the close of trading on Thursday. Currently there are four analysts that rate ResMed a buy, no analysts rate it a sell, and seven 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 positive front, Alphatec Holdings ( ATEC), up 14.7%, Nanosphere ( NSPH), up 13.8%, ZELTIQ Aesthetics ( ZLTQ), up 10.9%, and Intuitive Surgical ( ISRG), up 8.5%, were all gainers within the health services industry with Baxter International ( BAX) being today's featured health services industry leader.

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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