New Lifetime High For Salix Pharmaceuticals (SLXP)

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 Salix Pharmaceuticals ( SLXP) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Salix Pharmaceuticals as such a stock due to the following factors:

  • SLXP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $137.7 million.
  • SLXP has traded 30,806 shares today.
  • SLXP is trading at a new lifetime high.

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More details on SLXP:

Salix Pharmaceuticals, Ltd. acquires, develops, and commercializes prescription drugs and medical devices used in the treatment of various gastrointestinal diseases in the United States. SLXP has a PE ratio of 64.4. Currently there are 9 analysts that rate Salix Pharmaceuticals a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Salix Pharmaceuticals has been 906,600 shares per day over the past 30 days. Salix has a market cap of $6.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.06 and a short float of 14% with 6.15 days to cover. Shares are up 20.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Salix Pharmaceuticals as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, compelling growth in net income, 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 2.8%. Since the same quarter one year prior, revenues rose by 28.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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. Compared to other companies in the Pharmaceuticals industry and the overall market, SALIX PHARMACEUTICALS LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • 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 186.2% when compared to the same quarter one year prior, rising from $16.54 million to $47.33 million.
  • Powered by its strong earnings growth of 173.07% and other important driving factors, this stock has surged by 110.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • SALIX PHARMACEUTICALS LTD reported significant earnings per share improvement 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, SALIX PHARMACEUTICALS LTD reported lower earnings of $1.01 versus $1.46 in the prior year. This year, the market expects an improvement in earnings ($3.23 versus $1.01).

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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