Albany Molecular Research (NASDAQ: AMRI) provides
contract services to pharmaceutical and biotechnology companies. The firm offers drug discovery, screening programs, libraries for screening and hit-to-lead programs, and analytical quantification of drugs and metabolites in biological samples. The company also conducts its own research, aiming to license its compounds to other firms for further development. Albany Molecular owns a patent for fexofenadine HCl, the key ingredient in Sanofi-Aventis' (NYSE: SNY) antihistamine Allegra.
The company pleased investors last month, when it reported Q1 EPS of ten cents and revenues of $53.6 million. Analysts had been looking for three cents and $47.7 million. The CEO noted a 15% increase in Allegra-derived royalities. Management also guided Q2 EPS to 8-11 cents (ten cent consensus) and FY08 EPS to 38-42 cents (33 cent consensus). The AMRI price popped on the news and then moved into a bullish "flag" pattern.
The AMRI price
popped on the news and then moved into a bullish "flag" pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with one "buy" and one "hold". Analysts see a 64% growth rate through the next year. The AMRI Price to Book ratio (1.38), Sales Growth rate (10.61%) and Operating Margin (5.93%) compare favorably with industry and sector averages. Institutional investors hold about 74% of the outstanding shares. Over the past 52 weeks, the stock has traded between $9.25 and $19.05. A stop-loss of $12.25 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in either of the stocks mentioned above.
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