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:
- The stock is purchased by three or more insiders within one month.
- The stock is sold by no insiders in the month of intensive purchasing.
- 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.
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.
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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)
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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