Current stock price: $20.20
Industry: Health Services
ICON PLC is a contract research organization, providing outsourced development services on a global basis to the pharmaceutical, biotechnology and medical device industries.
What I like:
- ICON shows consistent, year over year sales growth, up from $630 million in 2007 to $900 million in 2010. Early 2011 results show sales in line with 2010.
- ICON has no debt whatsoever, be it short or long-term.
- The company's financial strength ratios (current ratios, debt-to-equity) do well in comparison to other companies in the industry.
- The company's ROI and ROA are well above industry averages.
- This company stands to grow as pharmaceutical companies continue their trend of outsourcing their testing operations. Regardless of the success or failure of a drug trial, ICON will make their money.
- ICON's stock is just coming off of its 52 week low of $18.93.
What I don't like:
- ICON has an incredibly clean balance sheet. If we're nitpicking, ICON's gross margins lag slightly behind industry averages.
- While the stock is at its 52 week low, the range the stock has traded in for the last year has been between $18.93 and $26.22. The low volatility of this stock could restrict its short-term growth.
Recommendation: Buy.
This firm features a nearly spotless balance sheet and consistent earnings growth. ICLR is based in Ireland, insulating the firm against a weakening U.S. economy. As stated above, many firms in this industry are outsourcing their clinical trials and ICLR stands to grow even further as this trend takes hold.
No comments:
Post a Comment