New Lifetime High Today: Akorn (AKRX)

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 $24.7 million.
  • AKRX has traded 92,225 shares today.
  • AKRX is trading at a new lifetime high.

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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 77.1. Currently there are 6 analysts that rate Akorn a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Akorn has been 986,500 shares per day over the past 30 days. Akorn has a market cap of $3.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.20 and a short float of 12.5% with 13.24 days to cover. Shares are up 38.1% 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, expanding profit margins and solid stock price performance. 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 5.4%. Since the same quarter one year prior, revenues rose by 22.7%. 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.
  • The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.46, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 237.70% to $23.38 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 -66.20%.
  • The gross profit margin for AKORN INC is rather high; currently it is at 56.91%. 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 10.84% trails the industry average.
  • Compared to its closing price of one year ago, AKRX's share price has jumped by 139.11%, exceeding the performance of the broader market during that same time frame. 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.

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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