Perilous Reversal Watch: Impax Laboratories (IPXL)
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Impax Laboratories as such a stock due to the following factors:
- IPXL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.4 million.
- IPXL has traded 635,807 shares today.
- IPXL is down 3% today.
- IPXL was up 9.4% yesterday.
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More details on IPXL:
Impax Laboratories, Inc., a specialty pharmaceutical company, develops, manufactures, and markets bioequivalent pharmaceutical products. It operates in two segments, Global Pharmaceuticals Division and Impax Pharmaceuticals Division. IPXL has a PE ratio of 1. Currently there are 2 analysts that rate Impax Laboratories a buy, 2 analysts rate it a sell, and 5 rate it a hold.
The average volume for Impax Laboratories has been 927,700 shares per day over the past 30 days. Impax has a market cap of $2.7 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.97 and a short float of 13.9% with 7.18 days to cover. Shares are up 31.6% year-to-date as of the close of trading on Friday.
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Analysis:
rates Impax Laboratories as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 3.7%. Since the same quarter one year prior, revenues rose by 39.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, IPXL has a quick ratio of 2.32, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 122.72% and other important driving factors, this stock has surged by 29.70% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- 45.59% is the gross profit margin for IMPAX LABORATORIES INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, IPXL's net profit margin of 16.17% is significantly lower than the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Pharmaceuticals industry and the overall market, IMPAX LABORATORIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Impax Laboratories Ratings Report.
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