New Lifetime High Reached: Actavis (ACT)

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

  • ACT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $1.7 billion.
  • ACT has traded 34,901 shares today.
  • ACT is trading at a new lifetime high.

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More details on ACT:

Actavis plc, an integrated specialty pharmaceutical company, is engaged in the development, manufacture, marketing, sale, and distribution of pharmaceutical products in the Americas, Europe, the Middle East, Africa, Australia, and the Asia Pacific. Currently there are 15 analysts that rate Actavis a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Actavis has been 2.8 million shares per day over the past 30 days. Actavis has a market cap of $68.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.65 and a short float of 1.2% with 0.32 days to cover. Shares are up 58.9% year-to-date as of the close of trading on Monday.

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 Actavis as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • ACT's very impressive revenue growth greatly exceeded the industry average of 8.8%. Since the same quarter one year prior, revenues leaped by 83.0%. 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, ACT's share price has jumped by 58.38%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ACT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 92.87% to $522.30 million when compared to the same quarter last year. In addition, ACTAVIS PLC has also vastly surpassed the industry average cash flow growth rate of -19.65%.
  • The gross profit margin for ACTAVIS PLC is rather high; currently it is at 64.53%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -28.31% is in-line with the industry average.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that ACT's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering 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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