Jun Bei Liu (Tribeca): Fisher & Paykel is a hold to sell. Look, I think it’s an incredible company, it’s probably a sell for me at this point. It’s an incredible company, done really, really well and delivered significant amount of earnings growth because of COVID-related products pull-through. And we think structurally will mean, and the hype for their product and the demand, will be significantly higher.
However, the current lump earning is pull forwards of many years of growth in their future. And with the earnings of trading more than 50 times it certainly seems they’re bit too rich at this point. We prefer the cheaper alternative such as ResMed at this point.
Livewire Markets: Too rich for Jun Bei. Are you a buy, hold, or sell on Fisher & Paykel?
Eleanor Swanson (Firetrail) : Yeah, we agree. Fisher & Paykel is a sell. As you’ve alluded to, two thirds of the business is focused on ventilators, selling them to hospitals. And just given COVID, Jun Bei has alluded to the pull forward of demand there. We do think some of that is sustainable, so they will retain some of the market share they’ve gained for this nasal high flow product.
However, over 50 times earnings well and truly price priced in, and in addition a third of the business is focused on sleep apnea and they’re actually losing market share in this segment, so it’s a sell for us.
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