New Lifetime High For Pharmerica (PMC)

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

  • PMC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.9 million.
  • PMC has traded 46,346 shares today.
  • PMC is trading at a new lifetime high.

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More details on PMC:

PharMerica Corporation operates as an institutional pharmacy services company in the United States. The company offers services to healthcare facilities; pharmacy management services to hospitals; specialty infusion services to patients outside hospitals; and oncology pharmacy services. PMC has a PE ratio of 87. Currently there are 4 analysts that rate Pharmerica a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Pharmerica has been 358,800 shares per day over the past 30 days. Pharmerica has a market cap of $983.1 million and is part of the services sector and retail industry. The stock has a beta of 1.19 and a short float of 5.5% with 3.76 days to cover. Shares are up 56.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pharmerica as a buy. 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, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • 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 100.0% when compared to the same quarter one year prior, rising from $4.80 million to $9.60 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.3%. Since the same quarter one year prior, revenues rose by 13.1%. 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 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 906.81% to $44.30 million when compared to the same quarter last year. In addition, PHARMERICA CORP has also vastly surpassed the industry average cash flow growth rate of 1.60%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.

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