This drug company is growing nearly 30% annually and its shares recently broke through their 50-day moving average, a bullish indicator.
ANI Pharmaceuticals (ANIP)
From The Periscope Report
Our top stock pick for 2016 was Vascular Solutions (VASC), which had a strong return of 63% for the year. We still like VASC and it remains a current recommendation from our firm.
Our top stock pick for 2017 is ANI Pharmaceuticals (ANIP), which markets branded and generic prescription pharmaceuticals. The company focuses on producing controlled substances for pain management (narcotics), anti-cancer (oncolytics), women’s health (hormones and steroids), and complex formulations including extended release and combination products.
ANIP has eight products that are either number one or number two in terms of market share, which is the premise behind our recommendation since market dominance is an essential attribute we look for. ANIP has 25 drugs on the market right now, with another 75 under development. The company introduced 11 new products in 2016 that led to 50% revenue growth. ANIP has two new products that should double the revenue base within two years: Corticotropin, which is used to treat multiple sclerosis and rheumatoid arthritis; and Inderal LA, which is a beta blocker used to treat high blood pressure.
We are expecting sales at ANIP to grow 26% in fiscal 2017 to $163.0 million. The net profit will grow 18% to $56.2 million, or $4.76 per share. The P/E on the 2017 forecast is cheap at 10.6 times. ANIP has the highest profit margins in the industry and generates strong cash flow, which gives the stock a Fair Value of $75 according to our net present value calculations.
Plus, ANIP’s existing portfolio, strong R&D pipeline, and high barriers to entry make it an attractive acquisition target. (Research Note: three of our seven recommendations made in 2016 were acquired.)
Tom Byrne, The Periscope Report, t2byrne@gmail.com, 4025 Sunset Ridge Drive, Canyon Ferry Crossing, Helena, MT 59602-9799, 406-465-4663, January 3, 2017