Lannett: 4 Different Insiders Have Purchased Shares This Month

In this article, I will feature one drug manufacturer that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

1. The stock is purchased by three or more insiders within one month.


2. The stock is sold by no insiders in the month of intensive purchasing.


3. At least two purchasers increased their holdings by more than 10%.

Lannett Company (LCI) develops, manufactures, packages, markets, and distributes generic versions of branded pharmaceutical products in the United States.

(click to enlarge)

Insider buying during the last 30 days

Here is a table of Lannett's insider-trading activity during the last 30 days by insider.

Name	Title	Trade Date	Shares Purchased	Current Ownership	Increase In Shares
James Maher	Director	Dec 17	500	4,875 shares	+11.4%
Kevin Smith	VP	Dec 13	100	59,403 shares	+0.2%
Martin Galvan	CFO	Dec 13	3,000	29,500 shares	+11.3%
Arthur Bedrosian	CEO	Dec 13	5,000	632,152 shares	+0.8%

There have been 8,600 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Lannett's insider-trading activity by calendar month.

Month	Insider buying / shares	Insider selling / shares
December 2013	8,600	0
November 2013	0	0
October 2013	0	0
September 2013	0	0
August 2013	0	0
July 2013	0	0
June 2013	0	0
May 2013	0	81,913
April 2013	0	50,000
March 2013	1,000	37,666
February 2013	4,000	30,800
January 2013	0	0

There have been 13,600 shares purchased and there have been 200,379 shares sold by insiders this year. The month of December has seen the most insider buying.

Financials

Lannett reported the fiscal 2014 first-quarter, which ended September 30, financial results on November 7 with the following highlights:

Revenue	$45.8 million
Adjusted net income	$6.7 million
Net loss	$6.0 million
Cash	$45.8 million
Debt	$6.4 million

(Source: December presentation)

Outlook

Lannett's fiscal 2014 guidance is as follows:

Net sales	$245-$255 million
Gross margin	57%-59%
R&D	$27-$29 million

(Source: December presentation)

Lannett noted that its guidance for fiscal 2014 does not include the impact of the JSP contract extension, which resulted in the non-recurring pre-tax charge of $20.1 million recorded in the first quarter of fiscal 2014.

(Source: December presentation)

Pipeline and upcoming milestones

Lannett has currently 43 marketed products and 15 ANDAs pending regulatory approval.

(Source: December presentation)

Lannett is anticipating five product approvals in fiscal 2014.

(Source: December presentation)

Competition

Lannett's competitors include Actavis (ACT), and Mylan (MYL). Here is a table comparing these companies.

Company LCI ACT MYL Market Cap: 1.07B 28.76B 16.28B Employees: 356 17,700 20,000 Qtrly Rev Growth (yoy): 0.30 0.57 -0.02 Revenue: 161.59M 7.65B 6.82B Gross Margin: 0.40 0.49 0.44 EBITDA: 30.77M 1.67B 1.86B Operating Margin: 0.15 0.12 0.19 Net Income: 4.40M -574.00M 605.44M EPS: 0.15 -4.41 1.52 P/E: 201.37 N/A 27.96 PEG (5 yr expected): 0.88 0.79 1.26 P/S: 6.63 3.76 2.39 Insider Ownership: 19.30% 0.40% 0.10%

Lannett has the highest insider ownership among these three companies.

Here is a table of these competitors' insider-trading activities during the last 30 days.

Company	Insider buying / shares	Insider selling / shares
ACT	0	74,364
MYL	5,000	586,378

Only Lannett has seen intensive insider buying during the last 30 days.

Conclusion

There have been four different insiders buying Lannett and there have not been any insiders selling Lannett during the last 30 days. Two of these four insiders increased their holdings by more than 10%. Lannett has an insider ownership of 19.30%.

There are four analyst buy ratings, one neutral rating, and zero sell ratings with an average price target of $34.60. The 50-day moving average is currently at $26.76, which could be a good entry point for the stock based on the intensive insider buying.

(Source: December presentation)

Source: Lannett: 4 Different Insiders Have Purchased Shares This Month

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in LCI over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

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