Sunday, April 24, 2016

Welcome viewers from Germany! I had 158 views in one day and I hope you enjoyed reading. Today I am back looking for another Value investing stock pick. My search led me to Mallinckrodt Pharmaceuticals PLC (Symbol MNK).

Dow Jones Industrial Average 18,003.75 (UP) week ending 04-22-2016

I decided that my goal now is to become the "Peter Lynch of Value Investing" and to pick out 75 to 100  good value stock investments. No small task indeed.

This week I have picked out a Mid-Cap Value International investment. Mallinckrodt Pharmaceuticals PLC (Symbol MNK, $66.27) Yeah, it would have been nice if I picked this one out 30 days ago when the price was lower but I think there is still plenty of room on the upside with this one. 

This stock is not without controversy though. It was shorted back it March by that blogger, which will remain unnamed, that likes to short a company's stock and then trash them in the press by creating doubts about what the company is doing at the present time. Well my blog is based on the facts as presented by the numbers presented in the company's audited financial reports, not on presumptions and innuendo.

...and here is what the numbers tell me:

First, MNK is trading at 1.47 of current book value. Earnings per share for this year are projected at $8.05 per share and for next year $8.77 per share. EPS quarter over quarter are up 34.3%.So the forward PE on this stock is 7.07 at the current price. The stock was trading last August, (2015), at $125.00 per share.

The price to free cash flow is 7.31 and I prefer it to be 10 or under. My traditional measurements of PEG and ROE are 1.77 and 10.20, so both a small bit out of my comfort zone. The Current ratio is 1.80 and the Quick is 1.50 both are fine. I had blogged about a stock earlier this year with similar dynamics an story which was Lannett Pharmaceuticals, (LCI), which I also still like and own.

MNK is 92.6 % institutional owned with T. Rowe Price and the Vanguard Mid Cap Fund firmly committed to the company and it shares. The company has a target price of $93.00.  Sales quarter over quarter have been up 19.10% and for the past 5 years have been up 10.30% annually. The stock just broke thorough its 50 Day Moving average to the upside. 

What do the Analyst think about the stock of this company based in Dublin, Ireland where they have the low corporate tax rates?  13 Buy and 3 Hold. 

Many of the Gurus have owned this one. Ken Heebner, Joel Greenblatt, George Soros, Mario Gabelli, David Dreman and John Paulson according to

The Investors Business Daily earnings ranking on this stock and sector is 91 and "A" and they are ranked 4th overall in their group. I just think it would be a good acquisition to purchase some shares for a 2 to 3 year buy and hold purchase. I think that you will be well rewarded.

Besides, you can always go and see Dublin at the shareholders meeting. You need to get away sometimes, don't you?

Best wishes for good investing and good health, Sláinte !


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