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"We rate PHARMERICA CORP (PMC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 237.1% when compared to the same quarter one year prior, rising from -$6.20 million to $8.50 million.
- PMC's revenue growth trails the industry average of 20.1%. Since the same quarter one year prior, revenues slightly increased by 7.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.76, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, PMC has a quick ratio of 1.69, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 233.33% and other important driving factors, this stock has surged by 34.71% 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.
- PHARMERICA CORP 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, PHARMERICA CORP reported lower earnings of $0.63 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $0.63).
- You can view the full analysis from the report here: PMC Ratings Report