Sell: Mallinckrodt Plc (MNK)
from Blue Chip Growth
Updated from Investment Digest 772, August 19, 2015
As far as Mallinckrodt Plc (MNK) is concerned, the biopharmaceutical company has slid in the weeks since its third-quarter report. Even with strong bottom-line growth, it missed analysts’ sales targets for the third quarter. This sparked a selloff that the stock hasn’t recovered from yet.
It is clear that downside risk has increased for MNK. Looking ahead to the fourth quarter, analysts have lowered the consensus earnings estimate by 11%. These kinds of revisions indicate that Mallinckrodt could very well disappoint with its next earnings announcement. I think we should take this as our cue to cut our losses. Sell MNK for a 30% loss.
Louis Navellier, Blue Chip Growth, www.bluechipgrowth.com, 800-718-8289, October 2015