Gut Call On Lannett Company, Inc. (LCI): Now It’s Really Down Too Much

Lannett Company, Inc. (NYSE:LCI) is one of the hottest stocks trading today on the U.S. Markets as the company shares are 2.83% or 0.19 points lower from last closing price of $6.72, reaching $6.53 at last check. Any clue why there is so much of action in the LCI stock? The share price is losing for the fifth day in a row and has dropped in 2 of the last 5 days and is up 20.68% over the past week. It will be exciting to see whether the stock manages to continue decreasing or take a minor break for the next few days. The move came on weak volume too with far less shares changing hands than in a normal session. Trading activity as of this writing weakened by -216,206 shares, and in total 59694 shares valued at $389802 were seen changing hands compared with 275900 shares valued at $1.854 million recorded at the previous session. You should take into consideration that a falling volume on lower prices shows the bearish trend but this is an early indication which means that the LCI stock is near its bottom.

Lannett Company, Inc. (LCI) shares have notched a 3-month gain of about 20.68%, but has still advanced 36.49% year to date. By comparison, the stock sank -50.04% over the past 12 months, while it jumped 16.12% over the 1 month. The company’s market cap is around $268.3M, with its short interest ratio standing at 18.7%.

In the current trading session for LCI, the stock witnessed two major price actions, it rose to a high of $6.64 and was down as much as $6.46 at one point. The high recorded is very low when compared to their 52-week high which is $3.33. The 52-week high is now at -52.64 distance from current price. Their recent low of $13.8 represents a 96.25% recovery. This data is quite important for investors who look to benefit from the recent rise of the company’s stock. The price target currently for LCI is $8.38, this is below the recent high that the stock attained. Taking a look at the overall sentimental views of financial analysts, the trading pattern of this stock recently is very clear.

The stock of Lannett Company, Inc. earned $-7.31 per share in the trailing 12 months and has a P/E ratio of -0.89. You can compare it with that of similar companies in its industry to get a sense of whether the stock you’re looking to purchase is overvalued or undervalued. Its current price to earnings ratio is lower than the ones recorded by the industry which is 29.89 and lower compared to the sector’s average of 32.67. When the P/E ratio is low let’s say below 1.0, then the stock price is considered a good value. LCI also has P/S multiple of 0.37. This is smaller versus the 12 month P/S ratios of other companies in the same indutry. The peer average price to sales ratio is 6.25x.

The company recorded an interesting insider purchase transaction by the Director on May 15, 2019. A Securities and Exchanges Commission filings show that Jeffrey Farber bought a total of 5,000 LCI shares that day for a sum of around $29,000. The filings show that the insider stake has now grown to 2,101,054 shares, currently worth $13,719,883. Lannett Company, Inc. (LCI) insiders have acquired 548,086 shares in the stock within the past three months. The total insider sales reported to the SEC in that time frame amounted to 8,291 shares. In total, individual insiders traded 556,377 shares in the business, which makes up 75.007% of 741,763 shares that were traded over a year. In the past 12 months, insiders have purchased 728,238 shares while the seller parted with 13,525 shares.

LCI‘s last price was down -1.66% as compared to the average trading price of 50 days recorded at $6.64 while enlarging the period to 200 trading days, the average closing price was $6.09. At present, there are 39.63 million in the total number of common shares owned by the public and among those 27.39 million shares have been available to trade. The percentage of shares being held by the company management was 8.1% while institutions stake was 86.63%. The company has generated negative returns on equity over the last 12 months (-70%). It managed to keep its gross profit margin at 37.7% over the past 12 months.

When assessing the full upside of the LCI stock, there is another set of technicals that should be looked into and considered. Its -0.99% decline from moving average of $6.6 has brought about a negative sentiment when calculated over the last 20 days. The market has allocated a beta of 2.36 to the stock. With the beta been greater than one, this implies that the company shares are theoretically more volatile than the market, something that the traders definitely are keeping an eye on.

Most of the analysts surveyed by Thomson/First Call think quite highly of Lannett Company, Inc. — 0 analysts rate the stock as a buy with another 0 rating it strong buy. There are 5 analysts who maintain a hold rating for the stock, with 0 giving it a sell rating. Analysts arrived at a 12-month price target of $21.875 on shares of Lannett Company, Inc. (NYSE:LCI), which corresponds to 236.02% upside potential than its current market price of $6.53 and implies potential despite the recent drop in the price. However, their current target price has fallen from $21.875 a month ago and is down handily from the consensus target of $21.875 a quarter ago.

In the last five years, the EPS of the company has been roughly 16.2%. Though the percentage looks encouraging, extra tailwinds are emerging as looking out over a next 5-year period, with analysts estimating that their earnings will increase annually by 15%. The revenue of the company has risen at an average annualized rate of about 35.3 over the last five years. The company recently recorded a drop of -0.9%, but this figure is rather unattractive.

Let’s briefly check the hedge fund interest towards LCI stock. Jacobs Levy Equity Management Inc. added position in the company after it grew 77.5% or 186,990 shares of its common stock. The hedge fund now owns 331,907 shares worth $2,167,353, SEC documents show. BlackRock Inc. shored up assets in the stock as 4799354 shares have been purchased, increasing its stake by 4.6% to 5,020,124 shares which are currently valued at $32,781,410. In addition, Parametric Portfolio Associates LLC recently reported that it now owns 283,420 shares making a total of $1,850,733 based on the recent price. This refelects a change of 2.3% in their ownership.