Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 358

On the pandemic front line: Fisher & Paykel Healthcare

Fisher & Paykel Healthcare stands out as a locally listed company that is playing a big role in the fight against COVID-19. It was also a stock that performed strongly during the recent market downturn.

Fisher & Paykel Healthcare Corporation Limited (FPH)

Source: ASX and Yahoo! Finance, as at 15 May 2020.

The Australian Ethical Charter requires us to invest in companies that contribute to human happiness and dignity. That means we actively seek out companies that have a positive impact on people's health and wellbeing. As a result, our portfolios tend to hold a higher proportion of healthcare companies compared with the benchmark.

Timing good for healthcare sector

There are also sound investment reasons to look for opportunities in healthcare. Companies in this sector tend to be fast growing with cashflows that are less susceptible to the economic cycle. They often have unique intellectual property. Fisher & Paykel meets these criteria and has a long track record of innovation and growth, making a range of medical devices including life-saving devices for adults, children and premature babies.

The healthcare sector is in the spotlight now as it mobilises to meet the increased burden created by the COVID-19 pandemic. This new respiratory disease causes some patients to ‘crash’ without warning to a point where they need help breathing. These patients tend to be intubated (ie, have a tube inserted into their trachea) and are then hooked up to a mechanical ventilator that breathes for them. This procedure is known as ‘invasive ventilation’. Tragically, some countries are so overwhelmed with cases that they simply do not have enough ventilators to go around.

Fisher & Paykel derives around 60% of its revenue from selling equipment and consumables to intensive care units (ICUs) and hospitals in the areas of invasive/non-invasive ventilation and respiratory support. When patients require invasive ventilation, the air needs to be moistened and warmed to body temperature and passed through tubes that minimise condensation. Fisher & Paykel is the world leader in these humidification systems.

The same humidification device also increasingly plays a role for patients who do not require invasive ventilation but do require some form of supplementary oxygen. These patients may either be in ICU or other parts of the hospital. The key innovation is the ability to deliver humidified oxygen at very high flow rates compared to standard oxygen therapy. Even prior to COVID-19, Fisher & Paykel were seeing strong uptake and growth in this ‘high flow’ technology platform where they are also the global leader.

Boost in demand

As ventilator suppliers rush to meet the increased medical demand, it is likely that this is boosting demand for Fisher & Paykel humidifiers. We expect Fisher & Paykel to rapidly scale up its production. Nasal high-flow is also likely to see increased demand, with one study of two hospitals in China finding that 63% of COVID-19 patients with severe acute respiratory failure were treated with high-flow oxygen therapy. As high-flow oxygen therapy is still a relatively new technology, it seems likely that the current crisis may speed up its growth even beyond the rapid uptake that was occurring prior to COVID-19.

Unsurprisingly, the share price of Fisher & Paykel has performed strongly over recent months and it is one of the top ASX 300 market performers this calendar year. However, unlike some other companies which have held up purely due to their defensive characteristics, Fisher & Paykel is playing a real and active role in mitigating the worst effects of the COVID-19 crisis. That’s good for patients, good for society and ultimately good for investors.

 

Mike Murray is an investment analyst at Australian Ethical, a sponsor of Firstlinks. This article is for general information and does not consider the circumstances of any investor.

For more articles and papers from Australian Ethical, please click here.

 


 

Leave a Comment:

RELATED ARTICLES

Mike Murray on watching for the changing narrative

5 new trends driving the future of biotech companies

How are vaccines actually produced in bulk?

banner

Most viewed in recent weeks

Are LICs licked?

LICs are continuing to struggle with large discounts and frustrated investors are wondering whether it’s worth holding onto them. This explains why the next 6-12 months will be make or break for many LICs.

Retirement income expectations hit new highs

Younger Australians think they’ll need $100k a year in retirement - nearly double what current retirees spend. Expectations are rising fast, but are they realistic or just another case of lifestyle inflation?

Welcome to Firstlinks Edition 627 with weekend update

This week, I got the news that my mother has dementia. It came shortly after my father received the same diagnosis. This is a meditation on getting old and my regrets in not getting my parents’ affairs in order sooner.

  • 4 September 2025

5 charts every retiree must see…

Retirement can be daunting for Australians facing financial uncertainty. Understand your goals, longevity challenges, inflation impacts, market risks, and components of retirement income with these crucial charts.

Why super returns may be heading lower

Five mega trends point to risks of a more inflation prone and lower growth environment. This, along with rich market valuations, should constrain medium term superannuation returns to around 5% per annum.

The hidden property empire of Australia’s politicians

With rising home prices and falling affordability, political leaders preach reform. But asset disclosures show many are heavily invested in property - raising doubts about whose interests housing policy really protects.

Latest Updates

Investment strategies

Why I dislike dividend stocks

If you need income then buying dividend stocks makes perfect sense. But if you don’t then it makes little sense because it’s likely to limit building real wealth. Here’s what you should do instead.

Superannuation

Meg on SMSFs: Indexation of Division 296 tax isn't enough

Labor is reviewing the $3 million super tax's most contentious aspects: lack of indexation and the tax on unrealised gains. Those fighting for change shouldn’t just settle for indexation of the threshold.

Shares

Will ASX dividends rise over the next 12 months?

Market forecasts for ASX dividend yields are at a 30-year low amid fears about the economy and the capacity for banks and resource companies to pay higher dividends. This pessimism seems overdone.

Shares

Expensive market valuations may make sense

World share markets seem toppy at first glance, though digging deeper reveals important nuances. While the top 2% of stocks are pricey, they're also growing faster, and the remaining 98% are inexpensive versus history.

Fixed interest

The end of the strong US dollar cycle

The US dollar’s overvaluation, weaker fundamentals, and crowded positioning point to further downside. Diversifying into non-US equities and emerging market debt may offer opportunities for global investors.

Investment strategies

Today’s case for floating rate notes

Market volatility and uncertainty in 2025 prompt the need for a diversified portfolio. Floating Rate Notes offer stability, income, and protection against interest rate risks, making them a valuable investment option.

Strategy

Breaking down recent footy finals by the numbers

In a first, 2025 saw AFL and NRL minor premiers both go out in straight sets. AFL data suggests the pre-finals bye is weakening the stranglehold of top-4 sides more than ever before.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.