The market had a short-lived rally on Monday as predicted. One stock I noticed that actually finished up for the day is a fast-growing drugmaker that has sold off recently, but which analysts believe can double.
According to the business description from Yahoo Finance, "Pernix Therapeutics Holdings, a pharmaceutical company, focuses on developing, marketing, and selling branded and generic pharmaceutical products for pediatric and adult indications in various therapeutic areas."
Here are six reasons why Pernix appears significantly undervalued at $7 a share:
- The five analysts who cover the stock have a median price target of $14 a share on Pernix, twice the current price.
- The company has over $1 a share in net cash (over 15% of its market capitalization).
- It has a forward P/E of under 13, a significant discount to its five-year average (20.5).
- Analysts expect the company to increase revenues by 17% this year and over 35% in FY 2013. It also has a five-year projected PEG substantially below 1 (0.55).
- The company doubled operating cash flow in FY 2011 from the year before, and company insiders have not sold any shares so far in 2012.
- Pernix has bounced off of slightly lower levels several times over the last year (see chart below).
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in PTX over the next 72 hours.