zaks gives prx the highest rating
.Par Pharmaceutical Companies Inc. (PRX): Zacks Rank Buy
Tracey Ryniec, On Friday April 9, 2010, 1:00 am EDT
Par Pharmaceutical Companies Inc. (NYSE: PRX - News) has surprised on the Zacks Consensus Estimate 4 quarters in a row by an average of 47%. PRX is trading with a forward P/E of only 12.6.
Company Description
Par Pharmaceutical manufactures generic drugs and branded pharmaceuticals for the specialty markets. The company ranks among the top ten in generic drug sales in the United States.
It has two divisions, Par Pharmaceutical, its generic drug segment, and Strativa Pharmaceuticals, its proprietary products segment which launched in 2005.
It currently markets and/or licenses more than 85 prescription drug products and has more than 30 products in active development.
Par Surprised in the Fourth Quarter by 14%
On Feb 24, Par Pharmaceutical reported fourth quarter results which beat the Zacks consensus by 8 cents. Earnings per share were 65 cents compared to the Zacks Consensus of 57 cents. This is also higher than the fourth quarter of 2008, where the company reported 21 cents.
Revenue rose 80% to $290.3 million from $161.3 million in the fourth quarter of 2008. For the full year, revenue jumped to $1.193 billion from $578 million in 2008.
The revenue gain was attributed to limited competition in metoprolol succinate, sumatriptan succinate, meclizine, and dronabinol.
Additionally, the launch of nateglinide and clonidine in the third quarter, and tramadol ER in the fourth quarter 2009, boosted quarterly revenue.
Tramadol ER was launched in Nov 2009 in 100mg and 200mg strengths. It is the generic version of Ortho-McNeil's Ultrama ER product of which annual U.S. sales are approximately $150 million.
Par has about 27 ANDAs pending with the FDA with 12 first-to-file opportunities with brand value of approximately $6.3 billion.
Zacks Consensus Estimates Climb
Analysts liked what they heard in February.
Estimates have been slowly rising. The first quarter Zacks Consensus is up 2 cents to 65 cents in the last 30 days.
The 2010 Zacks Consensus has increased by 4 cents to $2.01 per share. This is up sharply from just 90 days ago when analysts expected $1.64 per share.
The company reports first quarter results on May 1.
Value Fundamentals
Par Pharmaceutical is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of 1.8 which is under the industry average o 2.0 and within the value parameter of under 3.0.
The company also has a solid 1-year return on equity (ROE) of 18.9%.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
PAR PHARMA COS (PRX): Free Stock Analysis Report