Trade-Ideas: Akorn (AKRX) Is Today's New Lifetime High 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 Akorn ( AKRX) as a new lifetime high 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 $14.3 million.
  • AKRX has traded 753,728 shares today.
  • AKRX is trading at a new lifetime high.

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More details on AKRX:

Akorn, Inc. engages in the manufacture and marketing of diagnostic and therapeutic ophthalmic pharmaceuticals products, hospital drugs, and injectable pharmaceuticals in the United States and internationally. AKRX has a PE ratio of 45.4. Currently there are 6 analysts that rate Akorn a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Akorn has been 694,500 shares per day over the past 30 days. Akorn has a market cap of $1.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.08 and a short float of 14.8% with 15.35 days to cover. Shares are up 39.2% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Akorn as a buy. 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, good cash flow from operations, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.7%. Since the same quarter one year prior, revenues rose by 21.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.97, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 347.20% to $14.48 million when compared to the same quarter last year. In addition, AKORN INC has also vastly surpassed the industry average cash flow growth rate of -1.44%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 56.13% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • AKORN INC has improved earnings per share by 22.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AKORN INC reported lower earnings of $0.32 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.56 versus $0.32).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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