Akorn (AKRX) Hits New Lifetime High Today

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 $63.5 million.
  • AKRX has traded 22,063 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 87.8. 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 1.1 million shares per day over the past 30 days. Akorn has a market cap of $3.7 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 5.58 days to cover. Shares are up 46.2% 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, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • AKRX's very impressive revenue growth greatly exceeded the industry average of 4.5%. Since the same quarter one year prior, revenues leaped by 95.7%. 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.
  • Compared to its closing price of one year ago, AKRX's share price has jumped by 125.14%, 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.
  • AKORN INC's earnings per share declined by 27.3% 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 increased its bottom line by earning $0.46 versus $0.32 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus $0.46).
  • The gross profit margin for AKORN INC is rather high; currently it is at 53.24%. Regardless of AKRX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AKRX's net profit margin of 5.64% is significantly lower than the industry average.
  • The debt-to-equity ratio is very high at 2.40 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, AKRX has managed to keep a strong quick ratio of 2.31, which demonstrates the ability to cover short-term cash needs.

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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