Will ResMed Inc. Shares Fly Above $50?

Does this analyst make a good case? Or from is it just more noise Wall Street?

Apr 24, 2014 at 4:13PM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of ResMed (NYSE:RMD) gained about 1% today after the medical equipment company posted strong quarterly results and received a hold-to-buy upgrade from Deutsche Bank.

So what: Along with the upgrade, analyst David Low raised his price target to $52 (from $48), representing about 11% worth of upside to yesterday's close. So while momentum traders might be turned off by ResMed's sharp pullback over the past six months, Low's call could reflect a growing sense on Wall Street that its long-term growth potential is becoming too cheap to pass up.

Now what: According to Deutsche, ResMed's risk/reward trade-off is particularly attractive at this point. "While the risk of further price pressure cannot be ruled out we believe a return to more normal pricing and demand conditions is likely post CB2 and ResMed's sales growth in FY15 will be boosted by its new product range and its move into non-invasive ventilation in the US," said Low. "The key risk to our thesis is the potential for further funding reforms (i.e. bundled pricing) but such a change would take a number of years to introduce (assuming private payors follow CMS) and in the interim the market should continue to grow given the positive secular trends." When you couple that upbeat outlook with ResMed's still-reasonable PEG of 1.3, it's tough to disagree with Deutsche's bullishness. 

6 stock picks poised for incredible growth
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

Something big just happened

I don't know about you, but I always pay attention when one of the best growth investors in the world gives me a stock tip. Motley Fool co-founder David Gardner (whose growth-stock newsletter was rated #1 in the world by The Wall Street Journal)* and his brother, Motley Fool CEO Tom Gardner, just revealed two brand new stock recommendations moments ago. Together, they've tripled the stock market's return over 12+ years. And while timing isn't everything, the history of Tom and David's stock picks shows that it pays to get in early on their ideas.

Click here to be among the first people to hear about David and Tom's newest stock recommendations.

*"Look Who's on Top Now" appeared in The Wall Street Journal which references Hulbert's rankings of the best performing stock picking newsletters over a 5-year period from 2008-2013.