Trade-Ideas LLC identified

Lannett

(

LCI

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Lannett as such a stock due to the following factors:

  • LCI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $38.6 million.
  • LCI has traded 333,770 shares today.
  • LCI is down 3.8% today.
  • LCI was up 5.4% yesterday.

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More details on LCI:

Lannett Company, Inc. develops, manufactures, packages, markets, and distributes generic versions of branded pharmaceutical products in the United States. LCI has a PE ratio of 1. Currently there are 3 analysts that rate Lannett a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Lannett has been 1.2 million shares per day over the past 30 days. Lannett has a market cap of $1.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.94 and a short float of 38% with 11.18 days to cover. Shares are up 1.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Lannett as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • LCI's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 8.19, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Pharmaceuticals industry and the overall market, LANNETT CO INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has increased to $15.85 million or 10.13% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -0.35%.

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