New Lifetime High Reached: Mallinckrodt (MNK)

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

  • MNK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $291.4 million.
  • MNK has traded 3,912 shares today.
  • MNK is trading at a new lifetime high.

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More details on MNK:

Mallinckrodt public limited company develops, manufactures, markets, and distributes branded and generic specialty pharmaceuticals, active pharmaceutical ingredients (API), and diagnostic imaging agents worldwide. MNK has a PE ratio of 73.4. Currently there are 7 analysts that rate Mallinckrodt a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Mallinckrodt has been 2.6 million shares per day over the past 30 days. Mallinckrodt has a market cap of $4.8 billion and is part of the health care sector and drugs industry. Shares are up 55.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Mallinckrodt as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from the ratings report include:
  • Currently the debt-to-equity ratio of 1.67 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, MNK's quick ratio is somewhat strong at 1.20, demonstrating the ability to handle short-term liquidity needs.
  • In comparison to the other companies in the Pharmaceuticals industry and the overall market, MALLINCKRODT PLC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for MALLINCKRODT PLC is rather high; currently it is at 56.09%. 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 -3.69% is in-line with the industry average.
  • Net operating cash flow has improved to $26.90 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
  • MALLINCKRODT PLC has improved earnings per share by 10.6% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($4.22 versus $0.06).

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