Profits in generic drugs
The market hasn't been very kind lately and so there hasn't been a lot to write about. Today while screening on Barchart for stocks hitting new highs I can across Hospira Inc ( HSP )
It is a global specialty pharmaceutical and medication delivery company dedicated to advancing wellness by developing, manufacturing and marketing products that help improve the safety and efficacy of patient care. Their portfolio includes one of the industry's broadest lines of generic acute-care injectables, integrated solutions for medication management and infusion therapy, and a full-service contract manufacturing business.
Generic medicine has a great future as medical care providers attempt to rein in costs. HSP has a generic chemotherapy drug Oxaliplatin that should be a money maker. They now are in the US, Europe and Asia where socialized medicine in some of those countries like generics.
The stock hit 15 new highs in the last 20 sessions including 4 in the last 5 sessions. Last month the stock increased 10.43% in this soft market. Barchart's technical indicators have 9 buy signals for an overall buy signal of 64%. The stock trades around 57.30 with a 50 day moving average of 53.84.
The CAPS members on Motley Fool like this stock and vote 120 to 19 that the stock will beat the market with the All Stars voting in agreement 42 to 3. Fool notes that the columnists they follow have positive articles 9 to 0 in favor of this stock.
Wall Street brokerage analysts give 6 thumbs up will 6 buy recommendations published and 3 other firms are telling their clients to hold 'em if you got 'em. Sales are predicted to increase 4.20% this year and 5.50% next year. Double digit earnings increases of 11.90% this year, 15.20% next year are expected. An 11.60% 5 year compounded annual EPS growth rate of 11.60% will be a welcome sign for the long term.
The stock has a lot going for it:
1 - Already established generic market in the US and expanding into Europe and Asia
2 - Recent price momentum with a Barchart Trend Spotter (tm) buy signal
3 - Positive investor sentiment Wall Street buy recommendations based on increased sales and double digit EPS growth forecasts
Jim Van Meerten is an investor who writes on investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.
Disclosure: No positions in the stock mentioned at the time of publication