Akorn (AKRX) Marked As A Dead Cat Bounce Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Akorn as such a stock due to the following factors:
- AKRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $122.9 million.
- AKRX has traded 699,473 shares today.
- AKRX is up 3.1% today.
- AKRX was down 8.2% yesterday.
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More details on AKRX:
Akorn, Inc. manufactures and markets diagnostic and therapeutic ophthalmic pharmaceuticals, niche hospital drugs, and injectable pharmaceuticals in the United States and internationally. AKRX has a PE ratio of 46.3. Currently there are 8 analysts that rate Akorn a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Akorn has been 1.5 million shares per day over the past 30 days. Akorn has a market cap of $5.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.53 and a short float of 16% with 4.76 days to cover. Shares are up 36.3% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Akorn as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- AKRX's very impressive revenue growth greatly exceeded the industry average of 13.6%. Since the same quarter one year prior, revenues leaped by 168.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 105.3% when compared to the same quarter one year prior, rising from $16.68 million to $34.23 million.
- Net operating cash flow has increased to $16.65 million or 11.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -17.72%.
- The gross profit margin for AKORN INC is rather high; currently it is at 62.81%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.02% trails the industry average.
- Powered by its strong earnings growth of 107.14% and other important driving factors, this stock has surged by 93.73% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full Akorn Ratings Report.
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