Lannett Co. Inc. (LCI, Financial) CEO Arthur Bedrosian purchased 10,000 shares of the company for $20 per share on Feb. 6, according to a Form 4 filing with the Securities and Exchange Commission. He now owns 688,909 shares of the company.
Lannett has a market cap of $761.27 million, an enterprise value of $1.55 billion, a price-book (P/B) ratio of 1.46 and a price-sales (P/S) ratio of 1.20.
Headquartered in Philadelphia, Lannett engages in the development, manufacture, market and distribution of generic pharmaceutical products. The company was founded in 1942, and its pharmaceutical products are distributed to drug wholesalers, chain drug retailers, private label distributors, mail-order pharmacies, other pharmaceutical manufacturers, managed care organizations, hospital buying groups, governmental entities and health maintenance organizations.
According to GuruFocus, Lannett has a 4 out of 10 financial strength rating with a cash-debt ratio of 0.25 and an equity-asset ratio of 0.31. The Beneish M-score of -2.71 indicates the company is not a manipulator of its financial statements.
Lannett has a 7 out of 10 profitability and growth rating with an operating margin of 9.82%, a net margin of -3.61%, a return on equity (ROE) of -4.27%, three-year revenue growth of 40.60% and three-year EBITDA growth of 66.40%.
Bedrosian likely bought the shares because the company announced Tuesday that it had completed the extraction of the core software supporting the operations of Kremers Urban Pharmaceuticals Inc. from UCM Pharma, according to an article in the Wall Street Journal.
"Data extraction of an ERP system is complicated and I am pleased to report that our business did not skip a beat during the process," said Bedrosian. "Our IT team thoroughly planned and executed every step along the way to ensure a seamless transition. I want to acknowledge the excellence of our IT department with regard to this extraction as well as their efforts to implement SAP in our Silarx and Cody Laboratories subsidiaries."
Bedrosian may have been speculating that the news may have driven Lannett's market price up.
It is also noteworthy that Richard Snow (Trades, Portfolio) added to his holding in the company during the fourth quarter. Lannett’s market price is down an estimated 6% since Snow added to his position in the company.
Below is a Peter Lynch chart that shows Lannett Co is trading above its intrinsic value
Disclosure: Author does not own any shares of this company.
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