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I take a look at four pharmaceutical companies that have demonstrated profit margins of at least 24.5%. For this particular screen, I established three criteria. Each company must have:

  • Minimum Return On Equity (ROE) Of 24.50%
  • Minimum Return On Assets (ROA) Of 11.50%
  • Minimum Profit Margin (PM) Of 24.50%

Symbol

Price

ROE

ROA

PM

QCOR

$43.84

59.92%

41.52%

38.55%

GILD

$52.83

38.10%

14.93%

29.68%

OSIR

$10.20

24.88%

11.56%

26.21%

IMMU

$3.53

33.04%

17.02%

24.73%

Questcor Pharmaceuticals, Inc.: Shares of Questcor were trading at $43.84/share at the close of Tuesday's trading session, making the stock very attractive at current levels. Trading in a 52-week range of $24.14/share (52 week low) and $58.91/share (52 week high), Questcor has surpassed analysts in each of the last four quarters by an average of 21.625% and demonstrated an average estimated sales growth per quarter of 94.05% over the same period.

There are several reasons why I'm attracted to Questcor at current levels. First, the company demonstrates the best profit margins of the four companies screened, and has also demonstrated a very healthy ROE (59.92%) and ROA (41.52%). Potential investors could see the stock begin to trade in the high 40s or low 50s if Questcor can continue to demonstrate significant growth.

Gilead Sciences Inc.: Shares of Gilead were trading at $52.83/share at the close of Tuesday's trading session, making the stock attractive at current levels. Trading in a 52-week range of $34.45/share (52 week low) and $56.50/share (52 week high), Gilead has demonstrated an average estimated sales growth per quarter of 8.35% over the last four quarters.

There are several reasons why I'm attracted to Gilead at current levels. First, the company demonstrates the second best profit margins of the four companies screened, and has also demonstrated a very nice ROE (38.10%) and ROA (14.93%). Potential investors could see the stock begin to trade in the high 50s or low 60s if Gilead can continue to demonstrate significant growth.

Osiris Therapeutics, Inc.: Shares of Osiris were trading at $10.20/share at the close of Tuesday's trading session, making the stock affordable at current levels. Trading in a 52-week range of $4.12/share (52-week low) and $14.46/share (52 week high), Osiris has surpassed earnings estimates by 37.33% over the last three quarters, which is very impressive in my opinion.

There are several reasons why I'm attracted to Osiris at current levels. First, the company demonstrates the third best profit margins of the four companies screened, and has also demonstrated a reasonable ROE (24.88%) and ROA (11.56%). Potential investors could see the stock begin to trade in the high 12s or low 13s if Osiris can continue to demonstrate significant growth.

Immunomedics, Inc.: Shares of Immunomedics were trading at $3.53/share at the close of Tuesday's trading session, making the stock reasonably affordable at current levels. Trading in a 52-week range of $2.85/share (52 week low) and $4.33/share (52 week high), Immunomedics has surpassed earnings estimates by 203.23% over the last three quarters, with the only miss coming during the first quarter when the company missed estimates by 11.1%.

There are several reasons why I'm attracted to Immunomedics at current levels. First, the company demonstrates a decent profit margin of 24.73%, and has also demonstrated a reasonable ROE (33.04%) and ROA (17.02%). Potential investors could see the stock begin to trade in the high 3s or low 4s if Immunomedics can continue to demonstrate significant growth.

Disclosure: I am long OSIR, IMMU.

Source: 4 Pharma Companies With Profit Margins Of At Least 24.5%