SciClone Pharmaceuticals Inc Valuation – Initial Coverage $SCLN

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – December 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how SciClone Pharmaceuticals Inc (SCLN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): SciClone Pharmaceuticals, Inc. is a pharmaceutical company. The Company’s product portfolio of therapies includes oncology, infectious diseases and cardiovascular disorders. The Company operates in two segments: China and the Rest of the World, including its operations in the United States and Hong Kong. The Company’s lead product ZADAXIN (thymalfasin) is approved in approximately 30 countries, which is used for the treatment of hepatitis B virus (HBV), hepatitis C virus (HCV), and certain cancers according to the local regulatory approvals, and for use as an immune system enhancer. In addition to ZADAXIN, the Company markets approximately seven partnered and in-licensed products in China. The Company’s development portfolio includes Angiomax, Neucardin, Loramyc, Cleviprex, RapidFilm, VIBATIV and SGX942. The Company sells ZADAXIN in various international markets through its subsidiary, SciClone Pharmaceuticals International Ltd. (SPIL).

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ModernGraham Valuation of SCLN – December 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $525,966,687 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 7.48 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -1220.00% Fail
6. Moderate PEmg Ratio PEmg < 20 20.46 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.56 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 7.48 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $0.50
MG Growth Estimate 10.54%
MG Value $14.67
Opinion Undervalued
MG Grade B-
MG Value based on 3% Growth $7.19
MG Value based on 0% Growth $4.22
Market Implied Growth Rate 5.98%
Current Price $10.15
% of Intrinsic Value 69.19%

SciClone Pharmaceuticals, Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the lack of dividends. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.29 in 2012 to an estimated $0.5 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 5.98% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into SciClone Pharmaceuticals, Inc. revealed the company was trading above its Graham Number of $7.69. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 20.46, which was below the industry average of 38.69, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $3.03.

SciClone Pharmaceuticals, Inc. performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $3.03
Graham Number $7.69
PEmg 20.46
Current Ratio 7.48
PB Ratio 2.56
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $184,236,000
Total Current Liabilities $24,618,000
Long-Term Debt $0
Total Assets $233,361,000
Intangible Assets $32,101,000
Total Liabilities $24,696,000
Shares Outstanding (Diluted Average) 52,595,000

Earnings Per Share History

Next Fiscal Year Estimate $0.64
Dec2015 $0.56
Dec2014 $0.48
Dec2013 $0.20
Dec2012 $0.16
Dec2011 $0.49
Dec2010 $0.43
Dec2009 $0.25
Dec2008 -$0.18
Dec2007 -$0.22
Dec2006 $0.02
Dec2005 -$0.17
Dec2004 -$0.30
Dec2003 -$0.13
Dec2002 -$0.29
Dec2001 -$0.19
Dec2000 -$0.06
Dec1999 -$0.26
Dec1998 -$1.48
Dec1997 -$0.85
Dec1996 -$0.84

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $0.50
Dec2015 $0.41
Dec2014 $0.34
Dec2013 $0.28
Dec2012 $0.29
Dec2011 $0.29
Dec2010 $0.15
Dec2009 -$0.02
Dec2008 -$0.16
Dec2007 -$0.15
Dec2006 -$0.14
Dec2005 -$0.21
Dec2004 -$0.22
Dec2003 -$0.18
Dec2002 -$0.29
Dec2001 -$0.39
Dec2000 -$0.55

Recommended Reading:

Other ModernGraham posts about the company

None.  This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Merck & Co Inc Valuation – August 2016 $MRK
Mallinckrodt PLC Valuation – August 2016 $MNK
Vertex Pharmaceuticals Inc Valuation – August 2016 $VRTX
Amgen Inc Valuation – August 2016 $AMGN
Pfizer Inc Valuation – August 2016 $PFE
Abbott Laboratories Valuation – August 2016 $ABT
Johnson & Johnson Valuation – August 2016 $JNJ
Regeneron Pharmaceuticals Inc Valuation – August 2016 $REGN
AmerisourceBergen Corp Valuation – July 2016 $ABC
Perrigo Co PLC Valuation – July 2016 $PRGO

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Pfizer Inc Valuation – March 2017 $PFE

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Pfizer Inc (PFE) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Pfizer Inc. (Pfizer) is a research-based global biopharmaceutical company. The Company is engaged in discovering, developing and manufacturing of healthcare products. The Company’s segments include Pfizer Innovative Health (IH) and Pfizer Essential Health (EH). Its biopharmaceutical products include Lipitor, Sutent and the Premarin family of products. Its biotechnology products include BeneFIX, ReFacto and Xyntha. The Company’s contract manufacturing business, Pfizer CentreOne, consists of its contract manufacturing and active pharmaceutical ingredient sales operation, including manufacturing and supply agreements with Zoetis Inc., and Hospira’s One-2-One sterile injectables contract manufacturing operation. Its research focuses on six areas, which include immunology and inflammation, cardiovascular and metabolic diseases, oncology, vaccines, neuroscience and pain, and rare diseases. The Company’s subsidiaries include Hospira, Inc. and Medivation, Inc.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of PFE – March 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $201,828,009,978 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.25 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 37.10% Pass
6. Moderate PEmg Ratio PEmg < 20 19.39 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.52 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.25 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 4.01 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg $1.75
MG Growth Estimate -2.19%
MG Value $7.21
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth $25.41
MG Value based on 0% Growth $14.90
Market Implied Growth Rate 5.45%
Current Price $33.99
% of Intrinsic Value 471.23%

Pfizer Inc. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PB ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $2.05 in 2013 to an estimated $1.75 for 2017. This level of demonstrated earnings growth does not support the market’s implied estimate of 5.45% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Pfizer Inc. revealed the company was trading above its Graham Number of $23.25. The company pays a dividend of $1.2 per share, for a yield of 3.5%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 19.39, which was below the industry average of 28.95, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-11.87.

Pfizer Inc. scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$11.87
Graham Number $23.25
PEmg 19.39
Current Ratio 1.25
PB Ratio 3.52
Current Dividend $1.20
Dividend Yield 3.53%
Number of Consecutive Years of Dividend Growth 7


Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Total Current Assets $38,949,000,000
Total Current Liabilities $31,115,000,000
Long-Term Debt $31,398,000,000
Total Assets $171,615,000,000
Intangible Assets $107,097,000,000
Total Liabilities $112,071,000,000
Shares Outstanding (Diluted Average) 6,159,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.45
Dec2016 $1.17
Dec2015 $1.11
Dec2014 $1.42
Dec2013 $3.19
Dec2012 $1.94
Dec2011 $1.27
Dec2010 $1.02
Dec2009 $1.23
Dec2008 $1.20
Dec2007 $1.17
Dec2006 $2.66
Dec2005 $1.09
Dec2004 $1.49
Dec2003 $0.54
Dec2002 $1.46
Dec2001 $1.22
Dec2000 $0.59
Dec1999 $0.78
Dec1998 $0.73
Dec1997 $0.56

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.75
Dec2016 $1.52
Dec2015 $1.73
Dec2014 $1.95
Dec2013 $2.05
Dec2012 $1.43
Dec2011 $1.18
Dec2010 $1.24
Dec2009 $1.39
Dec2008 $1.49
Dec2007 $1.55
Dec2006 $1.64
Dec2005 $1.14
Dec2004 $1.13
Dec2003 $0.94
Dec2002 $1.08
Dec2001 $0.85

Recommended Reading:

Other ModernGraham posts about the company

Pfizer Inc Valuation – August 2016 $PFE
Dividend Investors Should Research These 10 Stocks – July 2016
10 Companies for Enterprising Dividend Investors – June 2016
10 Companies Benjamin Graham Would Invest In Today – June 2016
15 Best Stocks For Value Investors This Week – 2/13/16

Other ModernGraham posts about related companies

Supernus Pharmaceuticals Inc Valuation – Initial Coverage $SUPN
Lannett Company Inc Valuation – Initial Coverage $LCI
Spectrum Pharmaceuticals Inc Valuation – Initial Coverage $SPPI
Abbott Laboratories Valuation – January 2017 $ABT
Johnson & Johnson Valuation – January 2017 $JNJ
Allergan plc Valuation – January 2017 $AGN
Impax Laboratories Inc – Initial Coverage $IPXL
Alexion Pharmaceuticals Inc Valuation – December 2016 $ALXN
Akorn Inc Valuation – December 2016 $AKRX
SciClone Pharmaceuticals Inc Valuation – Initial Coverage $SCLN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Supernus Pharmaceuticals Inc Valuation – Initial Coverage $SUPN

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Supernus Pharmaceuticals Inc (SUPN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Supernus Pharmaceuticals, Inc. is a pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases. The Company offers products for the treatment of epilepsy, which include extended-release oxcarbazepine (Oxtellar XR) and extended-release topiramate (Trokendi XR). It develops multiple product candidates in psychiatry for the treatment of Impulsive Aggression (IA) and attention deficit hyperactivity disorder (ADHD). Its psychiatry product candidates include SPN-810 (molindone hydrochloride) and SPN-812 (viloxazine hydrochloride). It is also developing SPN-810 as a treatment for IA in patients who have ADHD and SPN-812 for the treatment of ADHD. It is developing SPN-809 (viloxazine hydrochloride) for the treatment of depression. It markets its products in the United States through its own specialty sales force and has collaborations with other pharmaceutical companies to license its products outside the United States.

SUPN Chart

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Downloadable PDF version of this valuation:

ModernGraham Valuation of SUPN – March 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,410,716,915 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.88 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -111.33% Fail
6. Moderate PEmg Ratio PEmg < 20 44.30 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 7.38 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.88 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.06 Pass
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg $0.61
MG Growth Estimate -4.25%
MG Value $0.65
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $8.90
MG Value based on 0% Growth $5.22
Market Implied Growth Rate 17.90%
Current Price $27.20
% of Intrinsic Value 4212.35%

Supernus Pharmaceuticals Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, low current ratio, insufficient earnings stability or growth over the last ten years, the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the lack of earnings stability or growth over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $1.07 in 2013 to an estimated $0.61 for 2017. This level of demonstrated earnings growth does not support the market’s implied estimate of 17.9% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Supernus Pharmaceuticals Inc revealed the company was trading above its Graham Number of $8.88. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 43.89, which was above the industry average of 28.95. Finally, the company was trading above its Net Current Asset Value (NCAV) of $0.65.

Supernus Pharmaceuticals Inc scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $0.65
Graham Number $8.88
PEmg 43.89
Current Ratio 1.88
PB Ratio 7.31
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Total Current Assets $151,404,000
Total Current Liabilities $80,742,000
Long-Term Debt $4,165,000
Total Assets $309,568,000
Intangible Assets $16,490,000
Total Liabilities $117,813,000
Shares Outstanding (Diluted Average) 52,021,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.95
Dec2016 $1.76
Dec2015 $0.28
Dec2014 -$0.26
Dec2013 -$2.90
Dec2012 -$2.72
Dec2011 $31.39
Dec2010 -$26.38

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.61
Dec2016 $0.04
Dec2015 $1.17
Dec2014 $1.02
Dec2013 $1.07
Dec2012 $2.19
Dec2011 $3.43
Dec2010 -$8.79

Recommended Reading:

Other ModernGraham posts about the company

None. This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Lannett Company Inc Valuation – Initial Coverage $LCI
Spectrum Pharmaceuticals Inc Valuation – Initial Coverage $SPPI
Abbott Laboratories Valuation – January 2017 $ABT
Johnson & Johnson Valuation – January 2017 $JNJ
Allergan plc Valuation – January 2017 $AGN
Impax Laboratories Inc – Initial Coverage $IPXL
Alexion Pharmaceuticals Inc Valuation – December 2016 $ALXN
Akorn Inc Valuation – December 2016 $AKRX
SciClone Pharmaceuticals Inc Valuation – Initial Coverage $SCLN
Regeneron Pharmaceuticals Inc Valuation – November 2016 $REGN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Lannett Company Inc Valuation – Initial Coverage $LCI

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Lannett Company Inc (LCI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Lannett Company, Inc. develops, manufactures, markets and distributes generic versions of brand pharmaceutical products. The Company manufactures and/or distributes prescription products with the exception of a small portfolio of over-the-counter products manufactured by its subsidiary, Silarx Pharmaceuticals, Inc. As of June 30, 2016, the Company’s products included Acetazolamide Tablets; Butalbital, Acetaminophen and Caffeine Tablets; Butalbital, Aspirin and Caffeine Capsules; C-Topical Solution; Digoxin Tablets; Glycolax Rx; Isosorbide Mononitrate CR; Levothyroxine Sodium Tablets; Methylphenidate HCL CD; Methylphenidate ER; Nifedipine CR; Omeprazole DR; Oxbutynin ER; Pantoprazole DR; Pilocarpine HCl Tablets; Triamterene w/Hydrochlorothiazide Capsules, and Ursodiol Capsules. The Company has additional products under development, which are orally administered solid oral-dosage products (tablet/capsule) or oral solutions, nasal, topicals or parentarels, as well as other dosage forms.

LCI Chart

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To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

Learn More About Premium Membership

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Downloadable PDF version of this valuation:

ModernGraham Valuation of LCI – February 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $783,776,729 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.00 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 1220.83% Pass
6. Moderate PEmg Ratio PEmg < 20 12.43 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.52 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.00 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.61 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $1.74
MG Growth Estimate 15.00%
MG Value $67.04
Opinion Undervalued
MG Grade C-
MG Value based on 3% Growth $25.25
MG Value based on 0% Growth $14.80
Market Implied Growth Rate 1.97%
Current Price $21.65
% of Intrinsic Value 32.29%

Lannett Company, Inc. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings stability over the last ten years, and the poor dividend history. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.25 in 2013 to an estimated $1.74 for 2017. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.97% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Lannett Company, Inc. revealed the company was trading above its Graham Number of $18.91. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 12.43, which was below the industry average of 28.95, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-14.62.

Lannett Company, Inc. receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$14.62
Graham Number $18.91
PEmg 12.43
Current Ratio 2.00
PB Ratio 1.52
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Total Current Assets $665,608,000
Total Current Liabilities $332,748,000
Long-Term Debt $867,221,000
Total Assets $1,752,922,000
Intangible Assets $809,631,000
Total Liabilities $1,216,272,000
Shares Outstanding (Diluted Average) 37,676,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.10
Jun2016 $1.20
Jun2015 $4.04
Jun2014 $1.62
Jun2013 $0.46
Jun2012 $0.14
Jun2011 -$0.01
Jun2010 $0.31
Jun2009 $0.27
Jun2008 -$0.10
Jun2007 -$0.29
Jun2006 $0.21
Jun2005 -$1.36
Jun2004 $0.63
Jun2003 $0.58
Jun2002 $0.36
Jun2001 $0.14
Jun2000 $0.08
Jun1999 $0.07
Jun1998 $0.05

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.74
Jun2016 $1.87
Jun2015 $1.89
Jun2014 $0.71
Jun2013 $0.25
Jun2012 $0.14
Jun2011 $0.10
Jun2010 $0.13
Jun2009 -$0.06
Jun2008 -$0.21
Jun2007 -$0.19
Jun2006 -$0.07
Jun2005 -$0.11
Jun2004 $0.46
Jun2003 $0.33
Jun2002 $0.19
Jun2001 $0.09

Recommended Reading:

Other ModernGraham posts about the company

None. This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Spectrum Pharmaceuticals Inc Valuation – Initial Coverage $SPPI
Abbott Laboratories Valuation – January 2017 $ABT
Johnson & Johnson Valuation – January 2017 $JNJ
Allergan plc Valuation – January 2017 $AGN
Impax Laboratories Inc – Initial Coverage $IPXL
Alexion Pharmaceuticals Inc Valuation – December 2016 $ALXN
Akorn Inc Valuation – December 2016 $AKRX
SciClone Pharmaceuticals Inc Valuation – Initial Coverage $SCLN
Regeneron Pharmaceuticals Inc Valuation – November 2016 $REGN
Merck & Co Inc Valuation – August 2016 $MRK

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Spectrum Pharmaceuticals Inc Valuation – Initial Coverage $SPPI

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Spectrum Pharmaceuticals Inc (SPPI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Spectrum Pharmaceuticals, Inc. is a biotechnology company. The Company operates through developing and commercializing oncology and hematology drug products segment. It has approximately six approved oncology/hematology products that target different types of non-Hodgkin’s lymphoma (NHL), metastatic colorectal cancer, acute lymphoblastic leukemia (ALL) and multiple myeloma (MM). It also has two drugs in late-stage development: SPI-2012, which is being developed for chemotherapy-induced neutropenia in patients with breast cancer, and EOQUIN, which is being developed for immediate intravesical instillation post-transurethral resection of bladder tumors in patients with non-muscle invasive bladder cancer. It has a product portfolio consisting of both commercial-stage and development-stage products that address various cancer types. Its commercialized products include FUSILEV, FOLOTYN, ZEVALIN, MARQIBO, BELEODAQ and EVOMELA. Its other products include SPI-2012, POZIOTINIB and EOQUIN.

SPPI Chart

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ModernGraham Valuation of SPPI – February 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $417,774,083 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.71 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 19.52% Fail
6. Moderate PEmg Ratio PEmg < 20 -7.08 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.63 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 3.71 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.62 Pass
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg -$0.73
MG Growth Estimate -4.25%
MG Value $0.41
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth -$10.57
MG Value based on 0% Growth -$6.19
Market Implied Growth Rate -7.79%
Current Price $5.16
% of Intrinsic Value 1248.83%

Spectrum Pharmaceuticals, Inc. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings stability or growth over the last ten years, the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the lack of earnings stability or growth over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $0.43 in 2012 to an estimated $-0.73 for 2016. This level of negative earnings does not support a positive valuation.As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Spectrum Pharmaceuticals, Inc. revealed the company was trading above its Graham Number of $0. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was -7.08, which was below the industry average of 28.95, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $0.41.

Spectrum Pharmaceuticals, Inc. scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $0.41
Graham Number $0.00
PEmg -7.08
Current Ratio 3.71
PB Ratio 1.63
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $231,414,000
Total Current Liabilities $62,332,000
Long-Term Debt $104,144,000
Total Assets $449,444,000
Intangible Assets $189,477,000
Total Liabilities $198,647,000
Shares Outstanding (Diluted Average) 79,303,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate -$1.02
Dec2015 -$0.78
Dec2014 -$0.71
Dec2013 -$1.02
Dec2012 $1.46
Dec2011 $0.86
Dec2010 -$0.95
Dec2009 -$0.48
Dec2008 -$0.45
Dec2007 -$1.17
Dec2006 -$0.96
Dec2005 -$1.06
Dec2004 -$0.98
Dec2003 -$4.83
Dec2002 -$12.34
Dec2001 -$36.50
Dec2000 -$109.25
Dec1999 -$92.00
Dec1998 -$51.75
Dec1997 -$28.50
Dec1996 -$7.75

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$0.73
Dec2015 -$0.40
Dec2014 -$0.17
Dec2013 $0.06
Dec2012 $0.43
Dec2011 -$0.20
Dec2010 -$0.75
Dec2009 -$0.71
Dec2008 -$0.86
Dec2007 -$1.31
Dec2006 -$2.27
Dec2005 -$5.66
Dec2004 -$16.23
Dec2003 -$32.90
Dec2002 -$51.41
Dec2001 -$68.50
Dec2000 -$75.62

Recommended Reading:

Other ModernGraham posts about the company

None. This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Abbott Laboratories Valuation – January 2017 $ABT
Johnson & Johnson Valuation – January 2017 $JNJ
Allergan plc Valuation – January 2017 $AGN
Impax Laboratories Inc – Initial Coverage $IPXL
Alexion Pharmaceuticals Inc Valuation – December 2016 $ALXN
Akorn Inc Valuation – December 2016 $AKRX
SciClone Pharmaceuticals Inc Valuation – Initial Coverage $SCLN
Regeneron Pharmaceuticals Inc Valuation – November 2016 $REGN
Merck & Co Inc Valuation – August 2016 $MRK
Mallinckrodt PLC Valuation – August 2016 $MNK

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Abbott Laboratories Valuation – January 2017 $ABT

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – January 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Abbott Laboratories (ABT) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Abbott Laboratories (Abbott) is engaged in the discovery, development, manufacture and sale of a line of healthcare products. The Company operates in four business segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products and Vascular Products. The Established Pharmaceutical Products segment includes the international sales of a line of branded generic pharmaceutical products. The Nutrition Products segment includes the sales of a line of adult and pediatric nutritional products. The Diagnostic Products includes the sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories and alternate-care testing sites. The Vascular Products includes the sales of coronary, endovascular, structural heart, vessel closure and other medical device products.

ABT Chart

ABT data by YCharts

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To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of ABT – January 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $69,531,384,871 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.56 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -40.35% Fail
6. Moderate PEmg Ratio PEmg < 20 21.40 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.86 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.56 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.28 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg $1.88
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth $27.32
MG Value based on 0% Growth $16.01
Market Implied Growth Rate 6.45%
Current Price $40.31
% of Intrinsic Value N/A

Abbott Laboratories does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $3.33 in 2012 to an estimated $1.88 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 6.45% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Abbott Laboratories revealed the company was trading above its Graham Number of $18.08. The company pays a dividend of $1.02 per share, for a yield of 2.5%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 21.4, which was below the industry average of 28.95, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-3.89.

Abbott Laboratories scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$3.89
Graham Number $18.08
PEmg 21.40
Current Ratio 1.56
PB Ratio 2.86
Current Dividend $1.02
Dividend Yield 2.53%
Number of Consecutive Years of Dividend Growth 3

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $12,978,000,000
Total Current Liabilities $8,321,000,000
Long-Term Debt $5,975,000,000
Total Assets $39,497,000,000
Intangible Assets $12,486,000,000
Total Liabilities $18,721,000,000
Shares Outstanding (Diluted Average) 1,476,366,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.03
Dec2015 $2.92
Dec2014 $1.49
Dec2013 $1.62
Dec2012 $3.72
Dec2011 $3.01
Dec2010 $2.96
Dec2009 $3.69
Dec2008 $3.12
Dec2007 $2.31
Dec2006 $1.12
Dec2005 $2.16
Dec2004 $2.06
Dec2003 $1.75
Dec2002 $1.78
Dec2001 $0.99
Dec2000 $1.78
Dec1999 $1.57
Dec1998 $1.50
Dec1997 $1.32
Dec1996 $1.19

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.88
Dec2015 $2.39
Dec2014 $2.27
Dec2013 $2.77
Dec2012 $3.33
Dec2011 $3.10
Dec2010 $2.98
Dec2009 $2.82
Dec2008 $2.31
Dec2007 $1.89
Dec2006 $1.71
Dec2005 $1.92
Dec2004 $1.76
Dec2003 $1.60
Dec2002 $1.52
Dec2001 $1.41
Dec2000 $1.57

Recommended Reading:

Other ModernGraham posts about the company

5 Speculative and Overvalued Companies to Avoid – March 2015
18 Companies in the Spotlight This Week – 3/21/15
Abbott Laboratories Annual Valuation – 2015 $ABT
26 Companies in the Spotlight This Week – 12/13/14
Abbott Labs Quarterly Valuation – December 2014 $ABT

Other ModernGraham posts about related companies

Johnson & Johnson Valuation – January 2017 $JNJ
Allergan plc Valuation – January 2017 $AGN
Impax Laboratories Inc – Initial Coverage $IPXL
Alexion Pharmaceuticals Inc Valuation – December 2016 $ALXN
Akorn Inc Valuation – December 2016 $AKRX
SciClone Pharmaceuticals Inc Valuation – Initial Coverage $SCLN
Regeneron Pharmaceuticals Inc Valuation – November 2016 $REGN
Merck & Co Inc Valuation – August 2016 $MRK
Mallinckrodt PLC Valuation – August 2016 $MNK
Vertex Pharmaceuticals Inc Valuation – August 2016 $VRTX

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Johnson & Johnson Valuation – January 2017 $JNJ

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – January 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Johnson & Johnson (JNJ) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Johnson & Johnson is a holding company, which is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. The Company’s segments include Consumer, Pharmaceutical and Medical Devices. The Consumer segment includes a range of products used in the baby care, oral care, skin care, over-the-counter pharmaceutical, women’s health and wound care markets. The Pharmaceutical segment is focused on over five therapeutic areas, including immunology, infectious diseases, neuroscience, oncology, and cardiovascular and metabolic diseases. The Medical Devices segment includes a range of products used in the orthopedic, surgery, cardiovascular, diabetes care and vision care fields. Its research facilities are located in the United States, Belgium, Brazil, Canada, China, France, Germany, India, Israel, Japan, the Netherlands, Singapore, Switzerland and the United Kingdom.

JNJ Chart

JNJ data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of JNJ – January 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $311,718,494,701 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.73 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 36.67% Pass
6. Moderate PEmg Ratio PEmg < 20 20.79 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.39 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.73 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.59 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $5.51
MG Growth Estimate 5.35%
MG Value $105.81
Opinion Fairly Valued
MG Grade B+
MG Value based on 3% Growth $79.94
MG Value based on 0% Growth $46.86
Market Implied Growth Rate 6.14%
Current Price $114.60
% of Intrinsic Value 108.30%

Johnson & Johnson is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $4.06 in 2012 to an estimated $5.51 for 2016. This level of demonstrated earnings growth supports the market’s implied estimate of 6.14% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Johnson & Johnson revealed the company was trading above its Graham Number of $60.27. The company pays a dividend of $3.1 per share, for a yield of 2.7%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 20.79, which was below the industry average of 28.95, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-1.54.

Johnson & Johnson performs fairly well in the ModernGraham grading system, scoring a B+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$1.54
Graham Number $60.27
PEmg 20.79
Current Ratio 2.73
PB Ratio 4.39
Current Dividend $3.10
Dividend Yield 2.71%
Number of Consecutive Years of Dividend Growth 20

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $63,319,000,000
Total Current Liabilities $23,230,000,000
Long-Term Debt $23,546,000,000
Total Assets $140,369,000,000
Intangible Assets $50,813,000,000
Total Liabilities $67,600,000,000
Shares Outstanding (Diluted Average) 2,785,400,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $6.04
Dec2015 $5.48
Dec2014 $5.70
Dec2013 $4.81
Dec2012 $3.86
Dec2011 $3.49
Dec2010 $4.78
Dec2009 $4.40
Dec2008 $4.57
Dec2007 $3.63
Dec2006 $3.73
Dec2005 $3.35
Dec2004 $2.74
Dec2003 $2.29
Dec2002 $2.16
Dec2001 $1.84
Dec2000 $1.61
Dec1999 $1.39
Dec1998 $1.06
Dec1997 $1.21
Dec1996 $1.09

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.51
Dec2015 $5.06
Dec2014 $4.74
Dec2013 $4.26
Dec2012 $4.06
Dec2011 $4.17
Dec2010 $4.41
Dec2009 $4.13
Dec2008 $3.87
Dec2007 $3.39
Dec2006 $3.13
Dec2005 $2.72
Dec2004 $2.31
Dec2003 $2.01
Dec2002 $1.79
Dec2001 $1.54
Dec2000 $1.35

Recommended Reading:

Other ModernGraham posts about the company

Johnson & Johnson Valuation – January 2016 Update $JNJ
Johnson & Johnson Analysis – September 2015 Update $JNJ
Johnson & Johnson Analysis – June 2015 Quarterly Update $JNJ
28 Companies in the Spotlight This Week – 2/28/15
Johnson and Johnson Company Quarterly Valuation – February 2015 $JNJ

Other ModernGraham posts about related companies

Impax Laboratories Inc – Initial Coverage $IPXL
Alexion Pharmaceuticals Inc Valuation – December 2016 $ALXN
Akorn Inc Valuation – December 2016 $AKRX
SciClone Pharmaceuticals Inc Valuation – Initial Coverage $SCLN
Regeneron Pharmaceuticals Inc Valuation – November 2016 $REGN
Merck & Co Inc Valuation – August 2016 $MRK
Mallinckrodt PLC Valuation – August 2016 $MNK
Vertex Pharmaceuticals Inc Valuation – August 2016 $VRTX
Amgen Inc Valuation – August 2016 $AMGN
Pfizer Inc Valuation – August 2016 $PFE

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Allergan plc Valuation – January 2017 $AGN

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – December 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Allergan plc (AGN) fares in the ModernGraham valuation model.

AGN Chart

AGN data by YCharts

[level-free]
To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of AGN – January 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $82,172,561,900 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.95 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 723.87% Pass
6. Moderate PEmg Ratio PEmg < 20 15.34 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.96 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 3.95 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $14.28
MG Growth Estimate 15.00%
MG Value $549.78
Opinion Undervalued
MG Grade C+
MG Value based on 3% Growth $207.06
MG Value based on 0% Growth $121.38
Market Implied Growth Rate 3.42%
Current Price $219.08
% of Intrinsic Value 39.85%

Allergan plc Ordinary Shares does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last ten years, and the poor dividend history. The Enterprising Investor has concerns regarding the lack of earnings stability over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1.5 in 2012 to an estimated $14.28 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.42% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Allergan plc Ordinary Shares revealed the company was trading below its Graham Number of $453.13. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 15.34, which was below the industry average of 28.95, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-56.42.

Allergan plc Ordinary Shares receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$56.42
Graham Number $453.13
PEmg 15.34
Current Ratio 3.95
PB Ratio 0.96
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $31,723,900,000
Total Current Liabilities $8,025,500,000
Long-Term Debt $0
Total Assets $143,607,700,000
Intangible Assets $109,648,500,000
Total Liabilities $53,881,800,000
Shares Outstanding (Diluted Average) 392,700,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $41.24
Dec2015 $10.01
Dec2014 -$7.42
Dec2013 -$5.27
Dec2012 $0.76
Dec2011 $2.06
Dec2010 $1.48
Dec2009 $1.96
Dec2008 $2.09
Dec2007 $1.27
Dec2006 -$4.37
Dec2005 $1.22
Dec2004 $1.26
Dec2003 $1.74
Dec2002 $1.62
Dec2001 $1.07
Dec2000 $1.52
Dec1999 $1.82
Dec1998 $1.22
Dec1997 $1.01
Dec1996 $0.89

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $14.28
Dec2015 $0.54
Dec2014 -$3.35
Dec2013 -$0.81
Dec2012 $1.50
Dec2011 $1.84
Dec2010 $1.31
Dec2009 $0.96
Dec2008 $0.41
Dec2007 -$0.21
Dec2006 -$0.54
Dec2005 $1.38
Dec2004 $1.45
Dec2003 $1.55
Dec2002 $1.45
Dec2001 $1.36
Dec2000 $1.43

Recommended Reading:

Other ModernGraham posts about the company

Allergan PLC Analysis – August 2015 Update $AGN
34 Companies in the Spotlight This Week – 2/7/15
Allergan Inc. Quarterly Valuation – February 2015 $AGN
27 Companies in the Spotlight This Week – 11/8/14
Allergan Inc. Quarterly Valuation – November 2014 $AGN

Other ModernGraham posts about related companies

Impax Laboratories Inc
Alexion Pharmaceuticals Inc Valuation – December 2016 $ALXN
Akorn Inc Valuation – December 2016 $AKRX
SciClone Pharmaceuticals Inc Valuation – Initial Coverage $SCLN
Regeneron Pharmaceuticals Inc Valuation – November 2016 $REGN
Merck & Co Inc Valuation – August 2016 $MRK
Mallinckrodt PLC Valuation – August 2016 $MNK
Vertex Pharmaceuticals Inc Valuation – August 2016 $VRTX
Amgen Inc Valuation – August 2016 $AMGN
Pfizer Inc Valuation – August 2016 $PFE

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Impax Laboratories Inc – Initial Coverage $IPXL

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – December 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Impax Laboratories Inc (IPXL) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Impax Laboratories, Inc. is a specialty pharmaceutical company. The Company is engaged in the development, manufacture and marketing of bioequivalent pharmaceutical products (generics), as well as the development and marketing of branded products. Its segments include Impax Generics and Impax Specialty Pharma. The Impax Generics segment is focused on the development, manufacture, sale and distribution of its generic products, which are the pharmaceutical and therapeutic equivalents of brand-name drug products and are marketed under their established drug names. The Impax Specialty Pharma segment is engaged in the promotion, sale and distribution of various branded products, including its branded pharmaceutical product, Rytary, an extended release oral capsule formulation of carbidopa-levodopa for the treatment of Parkinson’s disease, post-encephalitic Parkinsonism and Parkinsonism, and Zomig (zolmitriptan) products, indicated for the treatment of migraine headaches.

IPXL Chart

IPXL data by YCharts

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To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of IPXL – January 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,059,613,602 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.09 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -139.81% Fail
6. Moderate PEmg Ratio PEmg < 20 -45.23 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.11 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.09 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.22 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg -$0.31
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth -$4.50
MG Value based on 0% Growth -$2.64
Market Implied Growth Rate -26.86%
Current Price $14.02
% of Intrinsic Value N/A

Impax Laboratories Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings stability or growth over the last ten years, the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings stability or growth over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $1.42 in 2012 to an estimated $-0.31 for 2016. This level of negative earnings does not support a positive valuation.As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Impax Laboratories Inc revealed the company was trading above its Graham Number of $0. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was -45.48, which was below the industry average of 28.95, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-7.22.

Impax Laboratories Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$7.22
Graham Number $0.00
PEmg -45.48
Current Ratio 2.09
PB Ratio 1.11
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $700,586,000
Total Current Liabilities $334,533,000
Long-Term Debt $812,375,000
Total Assets $2,119,656,000
Intangible Assets $1,099,607,000
Total Liabilities $1,215,796,000
Shares Outstanding (Diluted Average) 71,331,000

Earnings Per Share History

Next Fiscal Year Estimate -$2.60
Dec2015 $0.54
Dec2014 $0.81
Dec2013 $1.47
Dec2012 $0.82
Dec2011 $0.97
Dec2010 $3.82
Dec2009 $0.82
Dec2008 $0.26
Dec2007 $2.06
Dec2003 -$0.28
Dec2002 -$0.42
Dec2001 -$0.60
Dec2000 -$0.91
Dec1999 -$1.12
Dec1998 -$0.73
Dec1997 -$1.97
Dec1996 -$1.08

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate -$0.31
Dec2015 $0.86
Dec2014 $1.21
Dec2013 $1.47
Dec2012 $1.42
Dec2011 $1.68
Dec2010 $1.80
Dec2009 $0.69
Dec2008 $0.48
Dec2007 $0.39
Dec2003 -$0.52
Dec2002 -$0.68
Dec2001 -$0.90
Dec2000 -$1.08
Dec1999 -$1.10
Dec1998 -$0.98
Dec1997 -$0.94

Recommended Reading:

Other ModernGraham posts about the company

None.  This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Akorn Inc Valuation – December 2016 $AKRX
SciClone Pharmaceuticals Inc Valuation – Initial Coverage $SCLN
Regeneron Pharmaceuticals Inc Valuation – November 2016 $REGN
Merck & Co Inc Valuation – August 2016 $MRK
Mallinckrodt PLC Valuation – August 2016 $MNK
Vertex Pharmaceuticals Inc Valuation – August 2016 $VRTX
Amgen Inc Valuation – August 2016 $AMGN
Pfizer Inc Valuation – August 2016 $PFE
Abbott Laboratories Valuation – August 2016 $ABT
Johnson & Johnson Valuation – August 2016 $JNJ

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Alexion Pharmaceuticals Inc Valuation – December 2016 $ALXN

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – December 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Alexion Pharmaceuticals Inc (ALXN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Alexion Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on the development and commercialization of life-transforming therapeutic products. The Company operates through innovation, development and commercialization of life-transforming therapeutic products segment. The Company’s marketed products include Soliris (eculizumab), Strensiq (asfotase alfa) and Kanuma (sebelipase alfa). The Company’s clinical programs include Soliris (eculizumab), ALXN 1101, ALXN 1007, SBC-103, ALXN 1210 and ALXN 5500. It offers Soliris for patients with either paroxysmal nocturnal hemoglobinuria (PNH), a life-threatening and ultra-rare genetic blood disorder, or atypical hemolytic uremic syndrome (aHUS), a life-threatening and ultra-rare genetic disease. Strensiq is a targeted enzyme replacement therapy. It offers Kanuma for the treatment of patients with Lysosomal Acid Lipase Deficiency (LAL-D). ALXN 1007 is a humanized antibody designed to target inflammatory disorders.

ALXN Chart

ALXN data by YCharts

[level-free]
To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of ALXN – December 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $24,979,334,534 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.11 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 441.18% Pass
6. Moderate PEmg Ratio PEmg < 20 60.73 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.10 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 3.11 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.78 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $1.92
MG Growth Estimate 13.72%
MG Value $69.09
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $27.87
MG Value based on 0% Growth $16.34
Market Implied Growth Rate 26.11%
Current Price $116.72
% of Intrinsic Value 168.93%

Alexion Pharmaceuticals, Inc. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last ten years, the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1 in 2012 to an estimated $1.92 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 26.11% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Alexion Pharmaceuticals, Inc. revealed the company was trading above its Graham Number of $46.28. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 60.73, which was above the industry average of 28.95. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-9.71.

Alexion Pharmaceuticals, Inc. scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$9.71
Graham Number $46.28
PEmg 60.73
Current Ratio 3.11
PB Ratio 3.10
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $2,594,534,000
Total Current Liabilities $834,341,000
Long-Term Debt $3,129,384,000
Total Assets $13,293,462,000
Intangible Assets $9,505,170,000
Total Liabilities $4,789,359,000
Shares Outstanding (Diluted Average) 226,088,000

Earnings Per Share History

Next Fiscal Year Estimate $2.51
Dec2015 $0.67
Dec2014 $3.26
Dec2013 $1.27
Dec2012 $1.28
Dec2011 $0.91
Dec2010 $0.52
Dec2009 $1.63
Dec2008 $0.20
Dec2007 -$0.64
Dec2006 -$1.04
Jul2005 -$0.98
Jul2004 -$0.86
Jul2003 -$1.16
Jul2002 -$0.78
Jul2001 -$0.82
Jul2000 -$0.36
Jul1999 -$0.14
Jul1998 -$0.22
Jul1997 -$0.24
Jul1996 -$0.24

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $1.92
Dec2015 $1.58
Dec2014 $1.84
Dec2013 $1.12
Dec2012 $1.00
Dec2011 $0.75
Dec2010 $0.49
Dec2009 $0.26
Dec2008 -$0.50
Dec2007 -$0.88
Dec2006 -$0.98
Jul2005 -$0.94
Jul2004 -$0.88
Jul2003 -$0.82
Jul2002 -$0.58
Jul2001 -$0.44
Jul2000 -$0.25

Recommended Reading:

Other ModernGraham posts about the company

Alexion Pharmaceuticals Inc. Analysis – August 2015 Update $ALXN
47 Companies in the Spotlight This Week – 5/16/15
Alexion Pharmaceuticals Quarterly Valuation – May 2015 $ALXN
58 Companies in the Spotlight This Week – 1/31/15
Alexion Pharmaceuticals Inc. Quarterly Valuation – January 2015 $ALXN

Other ModernGraham posts about related companies

SciClone Pharmaceuticals Inc Valuation – Initial Coverage $SCLN
Regeneron Pharmaceuticals Inc Valuation – November 2016 $REGN
Merck & Co Inc Valuation – August 2016 $MRK
Mallinckrodt PLC Valuation – August 2016 $MNK
Vertex Pharmaceuticals Inc Valuation – August 2016 $VRTX
Amgen Inc Valuation – August 2016 $AMGN
Pfizer Inc Valuation – August 2016 $PFE
Abbott Laboratories Valuation – August 2016 $ABT
Johnson & Johnson Valuation – August 2016 $JNJ
Regeneron Pharmaceuticals Inc Valuation – August 2016 $REGN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

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