Lannett (LCI) Flagged As Strong On High Volume

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.

Trade-Ideas LLC identified Lannett ( LCI) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Lannett as such a stock due to the following factors:

  • LCI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.9 million.
  • LCI has traded 105,324 shares today.
  • LCI is trading at 2.07 times the normal volume for the stock at this time of day.
  • LCI is trading at a new high 3.12% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on LCI:

Lannett Company, Inc. develops, manufactures, packages, markets, and distributes generic versions of branded pharmaceutical products in the United States. It offers solid oral, extended release, topical, and oral solution finished dosage forms of drugs that address a range of therapeutic areas. LCI has a PE ratio of 17.6. Currently there are 2 analysts that rate Lannett a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Lannett has been 906,000 shares per day over the past 30 days. Lannett has a market cap of $2.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.69 and a short float of 19.6% with 6.94 days to cover. Shares are up 41.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lannett 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, notable return on equity, attractive valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • LCI's very impressive revenue growth greatly exceeded the industry average of 11.1%. Since the same quarter one year prior, revenues leaped by 70.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • LCI's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.38, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, LANNETT CO INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for LANNETT CO INC is currently very high, coming in at 77.08%. It has increased significantly from the same period last year. Along with this, the net profit margin of 39.02% is above that of the industry average.

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