Liquidity is very important for biotech stocks, mostly because many of them are not producing earnings and must rely on sources of liquidity to sustain operations.
We ran a screen on the biotech industry for stocks seeing the most significant growth in liquidity over the past 10 years, with 10-year compound annual growth rates in current assets exceeding that in current liabilities by at least 5%.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Do you think these companies have sustainable operations? Use this list as a starting point for your own analysis.
1. Corcept Therapeutics Inc. (CORT): Engages in the discovery and development of drugs for the treatment of severe metabolic and psychiatric disorders. 10-year CAGR of current assets at 37.78% vs. 12.00% 10-year CAGR for current liabilities.
2. Hi Tech Pharmacal Co. Inc. (HITK): Develops, manufactures, markets and sells generic, prescription, over-the-counter and nutritional products in liquid and semisolid dosage forms in the United States. 10-year CAGR of current assets at 23.78% vs. 15.50% 10-year CAGR for current liabilities.
3. Myriad Genetics Inc. (MYGN): Focuses on the development and marketing of novel predictive medicine, personalized medicine and prognostic medicine products. 10-year CAGR of current assets at 11.79% vs. 0.54% 10-year CAGR for current liabilities.
4. Questcor Pharmaceuticals, Inc. (QCOR): Provides prescription drugs for central nervous system and inflammatory disorders. 10-year CAGR of current assets at 36.57% vs. 19.85% 10-year CAGR for current liabilities.
5. QLT Inc. (QLTI): Engages in the development and commercialization of therapies for the eye. 10-year CAGR of current assets at 0.45% vs. -5.86% 10-year CAGR for current liabilities.
6. Rigel Pharmaceuticals, Inc. (RIGL): Engages in the discovery and development of small-molecule drugs for the treatment of inflammatory/autoimmune diseases, as well as for certain cancers and metabolic diseases. 10-year CAGR of current assets at 12.65% vs. 3.47% 10-year CAGR for current liabilities.
7. Techne Corp. (TECH): TECHNE Corporation and its subsidiaries engage in the development, manufacture and sale of biotechnology products and hematology calibrators and controls primarily in the United States and Europe. 10-year CAGR of current assets at 6.38% vs. 1.36% 10-year CAGR for current liabilities.
8. Valeant Pharmaceuticals International, Inc. (VRX): Develops, manufactures and markets pharmaceutical products in the areas of neurology, dermatology and branded generics. 10-year CAGR of current assets at 14.63% vs. 9.26% 10-year CAGR for current liabilities.
9. VIVUS Inc. (VVUS): Engages in the development and commercialization of therapeutic products for underserved markets in the United States. 10-year CAGR of current assets at 19.49% vs. 0.27% 10-year CAGR for current liabilities.
*Data sourced from Screener.co.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
