Today's Pre-Market Trading Very Positive For 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.

Trade-Ideas LLC identified Mallinckrodt ( MNK) as a pre-market leader 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 $203.3 million.
  • MNK traded 10,589 shares today in the pre-market hours as of 8:01 AM.
  • MNK is up 4.3% today from Friday's close.

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More details on MNK:

Mallinckrodt public limited company develops, manufactures, markets, and distributes specialty pharmaceutical products and medical imaging agents worldwide. The company operates through two segments, Specialty Pharmaceuticals and Global Medical Imaging. Currently there are 8 analysts that rate Mallinckrodt a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Mallinckrodt has been 1.3 million shares per day over the past 30 days. Mallinckrodt has a market cap of $13.2 billion and is part of the health care sector and drugs industry. Shares are up 15.3% 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 hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • MNK's very impressive revenue growth greatly exceeded the industry average of 11.1%. Since the same quarter one year prior, revenues leaped by 60.4%. 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, MNK's share price has jumped by 58.89%, exceeding the performance of the broader market during that same time frame. Although MNK had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • MNK's debt-to-equity ratio of 0.78 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that MNK's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.84 is high and demonstrates strong liquidity.
  • Compared to other companies in the Pharmaceuticals industry and the overall market, MALLINCKRODT PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • MALLINCKRODT PLC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MALLINCKRODT PLC swung to a loss, reporting -$3.57 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($7.32 versus -$3.57).

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