DUSA Pharmaceuticals (DUSA) just showed up on my investment radar today due to positive results from one of its Phase II trials. The stock sports a robust balance sheet, good technicals, solid growth prospects and cheap valuations. Growth investors should take a good look at this company as a possible investment.
"DUSA Pharmaceuticals is a vertically integrated dermatology company, develops and markets Levulan photodynamic therapy (PDT) and other products for common skin conditions primarily in the United States, Canada, and Korea." (Business description from Yahoo Finance)
7 reasons to buy DUSA at $5.50 a share:
- The company announced positive results today for its Phase II results for one of its dermatology platform pipeline products for treating lesions. Results show significant reductions.
- The company boasts a robust balance sheet with over $30mm in net cash on the balance sheet (approximately 30% of its market capitalization).
- DUSA should clock over 15% revenue growth for FY2012 and analysts see over 20% sales increases in FY2013. The stock has a five year projected PEG of under 1 (.60).
- The stock is selling at around 40% less than the mean analyst price target of $7.67 a share. Two analysts have $7.50 targets and the other analyst that covers the stock has an $8 target.
- The company has more than doubled operating cash flow since FY2010 and is selling at the bottom of its five year valuation based on P/CF.
- DUSA sells for less than 12 times forward earnings, a massive discount to its five year average (37.5).
- The stock has built a nice technical support foundation at the $5 level (See Chart).