It’s head above the clouds for the ResMed Inc (ASX: RMD) share price, which marked a new all-time high of $33.14 on 30 June.
Despite no price-sensitive news last month, shares in the respiratory device company rallied by an impressive 20.8%.
Let’s take a closer look at what might have influenced the move to record highs.
ResMed share price surges after product recall
Health technology conglomerate Philips announced a major product recall for a number of its ventilator devices to “address identified potential health risks”.
Philips identified potential health risks relating to the polyester-based polyurethane (PE-PUR) sound abatement foam component in these devices.
The company said the PE-PUR foam may degrade into particles, entering the device’s air pathway and be ingested or inhaled by the user.
While there have been no reports of death, the company flagged potential risks including headache, irritation, inflammation, respiratory issues, and possible toxic and carcinogenic effects.
Philips released this news on 14 June, coinciding with a 6.39% surge in ResMed shares to $30.31.
By month’s end, the ResMed share price would rally by 15.11% to $32.79.
What else should investors know?
Investors might want to note the volatile nature of ResMed shares, especially in the wake of its quarterly results.
Take the company’s most recent third quarter results on 30 April, for example.
ResMed reported a 0.1% fall in revenue to US$768.8 million against the elevated prior corresponding period. This period was boosted by heightened demand for its ventilators amid the peak of COVID-19.
Unfortunately, the ResMed share price crashed 6.34% to $25.41 on the day of the announcement.
Similarly, its second quarter results also exhibited a wild swing in share price. It slipped 1.09% on the day of the announcement and a further 3.57% the next day to $26.44.
However, the quarterly results do not always signal a fall.
The company’s first quarter results on 30 October 2020 witnessed a 9.45% spike in the ResMed share price to $27.92.
The post The ResMed (ASX: RMD) share price was up 20% in June. Here’s why appeared first on The Motley Fool Australia.
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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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