Rudi's View | Jun 18 2026
In this week's edition:
- (More) Patience Required
- What To Buy Ahead Of June 30
- What Not To Buy (Sell) Ahead Of June 30
By Rudi Filapek-Vandyck, Editor
(More) Patience Required
A largely moribund share market harbours many frustrations, even if money is currently flowing into Australian shares ahead of June 30.
My personal suspicion is institutional investors don't want to close off the financial year with too much loose change sitting idle.
The odd irony here is that instos buying is meeting tax loss selling elsewhere. This might create some odd dynamics over the remaining eight trading sessions in June.
No doubt, one particular stock that has frustrated many throughout the year past is CPAP champion ResMed ((RMD)).
After selling down upon coordinated global attack on potential GLP-1 impacted business models in 2023, that share price made it all the way back above $40 (from circa $21 at the peak of selling), but the twelve months past has seen it retreat back into the $26-$27 region.
So much for making fun out of traders believing GLP-1s will eradicate obesity and with it all businesses who somehow benefit from it.
Investing in the share market is supposed to be closely linked to corporate earnings, but that correlation has gone painfully missing during these processes.
Anyone frustrated surely includes management at the company. At face value, ResMed has done everything its local peers could not during the post-covid era, growing roughly at 20% per annum and increasing its margins.
The precise data were summed up by Morgan Stanley on Thursday morning: 19% EPS growth per annum over the three years to March 2026 while revenue grew by 11% (the difference is made up by gross margin expansion).
Current consensus forecasts are for 18.3% EPS growth for FY26 --yet again, exceptional when compared to CSL, Cochlear, Sonic Healthcare and the like-- though FX headwinds and less room for further margin increases are tempering expectations for next year.
Consensus is currently positioned for "only" 9.3% EPS growth in FY27. Yes, that is a major step down from what has been achieved in previous years.
Is this why the share price is where it is? We observe general sentiment towards the healthcare sector --globally-- is still net negative.
Stockbrokers covering the company in Australia all had Buy-equivalent ratings with price targets well above the share price, suggesting the market, yet again, was playing silly buggers for all the wrong reasons.
Note the verb in that previous sentence; 'had' not 'have'.
Morgan Stanley downgraded the stock this morning, handing traders yet another opportunity to push the share price down by a further 3.8% on the day.
But let's first zoom in on what Citi analysts had to say earlier in the week.
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