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

Raising the GST to 15%

Treasurer Jim Chalmers aims to tackle tax reform but faces challenges. Previous reviews struggled due to political sensitivities, highlighting the need for comprehensive and politically feasible change.

Here's what should replace the $3 million super tax

With Div. 296 looming, is there a smarter way to tax superannuation? This proposes a fairer, income-linked alternative that respects compounding, ensures predictability, and avoids taxing unrealised capital gains. 

100 Aussies: seven charts on who earns, pays, and owns

The Labor government is talking up tax reform to lift Australia’s ailing economic growth. Before any changes are made, it’s important to know who pays tax, who owns assets, and how much people have in their super for retirement.

9 winning investment strategies

There are many ways to invest in stocks, but some strategies are more effective than others. Here are nine tried and tested investment approaches - choosing one of these can improve your chances of reaching your financial goals.

The rubbery numbers behind super tax concessions

In selling the super tax, Labor has repeated Treasury claims of there being $50 billion in super tax concessions annually, mostly flowing to high-income earners. This figure is vastly overstated.

With markets near record highs, here's what you should do with your portfolio

Markets have weathered geopolitical turmoil, hitting near record highs. Investors face tough decisions on valuations, asset concentration, and strategic portfolio rebalancing for risk control and future returns.

Latest Updates

Investment strategies

Finding income in an income-starved world

With term deposit rates falling, bonds holding up but with risks attached, and stocks yielding comparatively paltry sums, finding decent income is becoming harder. Here’s a guide to the best places to hunt for yield.

Economy

Fearful politicians put finances at risk

A tearful Treasury chief, a backbench rebellion, and crashing bonds. What just happened in the UK and why could Australia’s NDIS be headed for the same brutal fiscal reality?

Shares

Investing at market peaks: The surprising truth

Many investors are hesitant to buy into a market that feels like it’s already climbed too far, too fast. But what does nearly a century of market history suggest about investing at peaks?

Shares

Chinese steel - building a Sydney Harbour Bridge every 10 minutes

China's steel production, equivalent to building one Sydney Harbour Bridge every 10 minutes, has driven Australia's economic growth. With China's slowdown, what does this mean for Australia's economy and investments?

Investment strategies

Will stablecoins change the way we pay for things?

Stablecoins have been hyped as a gamechanger for the payments industry. But while they could find success in certain niches, a broader upheaval of Visa and Mastercard's payments dominance looks unlikely.

Infrastructure

An investing theme you can bet on for the next 30 years

Investors view infrastructure as a defensive asset class rather than one with compelling growth prospects. These five tailwinds for demand over the coming decades suggest that such a stance could be mistaken.

Investment strategies

A letter to my younger self: investing through today's chaos

We are trading through one of history's most confounding market environments. One day, financial headlines warn of doomsday scenarios. The next, they celebrate a new golden age. How can investors keep a clear head?

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.